Tag: equity investment
Investing some of the Social Security trust fund’s assets in equities has always had obvious appeal. Equity investment has higher expected returns relative to safer assets, so Social Security might need less in tax increases or benefit cuts to achieve long-term solvency. On the other hand, equity investments involve greater risk and raise concerns about…
The brief’s key findings are: Investing part of Social Security’s reserves in equities has obvious appeal: a higher return means less tax hikes or benefit cuts. But critics fear that equity investment could interfere with private markets or signal that trading bonds for stocks creates magic money. The evidence from the U.S. and Canada shows that suc…
