N8D

America's Biggest Mistake? A portion of every American's paycheck is deposited into the Social Security trust fund (OASI), which is then invested to create returns that aim to support long-term retirement payments. Since 1941, OASI has ONLY invested in US treasuries, averaging an annual return of just 4.8%. Meanwhile the S&P500 has been compounding returns at 10.5% per year. If instead of buying treasuries, OASI bought the S&P500 index starting in 1971 (the year the US went off the gold standard), it would have a $15.1T balance today and Americans would all share ownership of ~1/3 of America's best companies, likely supporting increased retirement benefits, lowering taxes, and reducing Federal debt levels while being the world's largest sovereign wealth fund. Instead, OASI has a $2.7T balance today and is projected to go bankrupt in 2032, as retirement benefits swell while annual returns on US treasuries held by OASI have shrunk to <3% per year recently. Many economic inequities in America can be traced back to this structural mistake. By not investing OASI in equities, only privileged Americans with private pensions, 401(k)s, IRAs, and other investment retirement accounts have benefited from the marvel of American capitalism, leaving behind the tens of millions of Americans who had no choice but to rely on Social Security and were left reliant on low-yielding US treasuries. It is not too late to change. Social Security can still pivot to an equity-driven investment model, driving future balance sheet growth, providing investment capital to American businesses, reducing the dependence on Federal taxes and money-printing, and giving all Americans ownership in America's best businesses. Rather than create a new sovereign wealth fund, while ignoring the imminent failure of Social Security, legislators can restructure Social Security. By adding ~$500B directly to OASI, investing the entire balance in the S&P 500, and assuming future annual returns of ~10.5%, OASI will grow while also meeting all future retirement obligations, rather than shrink away into insolvency. The longer we wait to fix Social Security, the more expensive it will become... shifting to an equity-driven investment model now could ensure its long-term viability, address economic inequities across the US, create the world's largest sovereign wealth fund, and give every American ownership and participation in the rewards of American capitalism.