This is the Cato Daily Podcast for Wednesday, April 12, 2017.

I'm Keelib Brown.

Should Social Security revenues be put into the stock market and should the government

control those investments.

Michael Tanner, a senior fellow at the Cato Institute, says Social Security definitely needs an overhaul

but in the direction of letting individual workers decide what to do with their own retirement savings.

Alicia Manel at Boston College, who I must note has done some excellent work when it comes to

state pensions and helping the people who

are supposed to be in charge of those state pensions understand better what they're doing,

has argued that perhaps the federal government should be putting the Social Security

trust fund, that misnomer of a trust fund that it is into the stock market.

Well, she's absolutely right in a couple of ways.

Number one is, of course, she is correct

that the Social Security system is massively underfunded.

Its unfunded liabilities over the infant horizon are about

32 trillion dollars. And she's right in that this stems in part from the structure of the

Social Security system which is a pay-go system in which it's not funded,

we simply transfer money from young people to old people.

So her suggestion that Social Security funds be invested in real return-bearing assets like stocks and

bonds and annuities and so forth is actually a pretty good one and in this case she

calls for investing in equities since they outperformed bonds over the long run and I think she's exactly correct in that.

All right so the problem is... The problem is that she suggests that the government

...