Diary

Who Exactly Wanted to Invest Social Security in Stock Market?

The Democrats are hoping to use the turmoil in the stock market to scare seniors in a typical election year smear. They’re charging that if Republicans had their way, all their Social Security would be “tied up” in the stock market. Of course, it is simply not true, as this article in The Politico shows.

However, there is one politician who promoted investing Social Security in the stock market: Bill Clinton.

In his 1999 State of the Union address, Clinton proposed investing $700 billion of the Social Security Trust Fund surplus in the stock market, which would have made the U.S. Government the biggest player on Wall Street.

Clinton’s $700 billion plan was subject to intense debate, with Alan Greenspan telling senators that it would be impossible to keep political considerations out of investment decisions (my guess it would be “No” to profitiable fast food, oil, and cigarette companies, but “Yes’ to risky green industries) and therefore it would not be the most productive use of capital. The plan eventually died a well-deserved death.

So before Democrats go about casting stones on voluntary privatization efforts, they should remember their own history in this regard.