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the US Social Security program is meant
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to be kind of the retirement program for
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folks that don't have access to private
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retirement accounts this program was set
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up in the 1930s after the Great
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Depression there's a trust fund the
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OASDI which is the fund that they invest
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the capital so every year we all put
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money in with our social security taxes
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out of our paychecks goes in there it
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gets invested in one thing us treasuries
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which have averaged about
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4.8% return since the beginning of the
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program per year meanwhile the S&P has
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been averaging 11% so here's the map if
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in 1971 which was the year that we went
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off the gold standard in the United
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States if we invested the Social
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Security trust fund in the S&P the
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balance of the Social Security trust
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fund today would be $15 trillion that
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would be roughly onethird of the value
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of the total s&p500 which would be
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jointly owned by all Americans now
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here's what's up the middle class people
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who had access to private retirement
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accounts benefited by buying the S&P 500
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and the wealthy were able to access it
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so all of the equity value that accured
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from American Enterprise and the
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prosperity of the American system
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accured to the people that had access to
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the private accounts meanwhile the
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people that only had access to the
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Public Accounts got stuck owning
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treasuries today the Social Security
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trust fund has $2.7 trillion balance and
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based on the outflows and inflows it's
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going to go bankrupt in 2032 so I did
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the math if you assume that the S&P 500
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continues to grow at 10 a half% a year
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on average we could put about $500
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billion in the trust fund today and it
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will not go bankrupt again and it will
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continue to grow every year and then all
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americ Americans have participation in
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American Enterprise and importantly this
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becomes the world's largest Sovereign
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wealth fund ever you don't need a
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separate Sovereign wealth fund we
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already have one we've totally
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mismanaged it and I went back to trying
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and understand why this is the case why
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have we only ever bought treasuries
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early on the US needed someone to loan
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money so they basically forc the
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citizens to loan the government money in
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the form of treasuries but today the
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Social Security trust fund owns less
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than 10% about 8% of the total treasury
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bonds outstanding so why are we forcing
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all the American citizens to partip for
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no reason through the Social Security
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System we've created the Deep inequity
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we see in this country If instead we had
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allowed the social security system to
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invest in the S&P 500 to buy American
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Enterprises to fund American businesses
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then every American would be wealthy and
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that middle class that uniquely
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participated by basically arbitraging
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the market where they forced the
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treasury bond yields on the poor and
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they got to take access to the equity
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yields would have not happened
