The brief’s key findings are:
- Some have advocated investing Social Security trust fund assets in equities.
- A similar proposal adopted by the railroads in 2001 suggests two key hurdles: political risk and financial risk.
- For political risk, the railroads created an independent trust; a better fit for Social Security might be to limit investments to index funds.
- For financial risk, the railroads set up an automatic mechanism to respond to shocks; Social Security would need a similar mechanism.