Essay: Nature of social security fund investments

31 Jan

Essay: Nature of social security fund investments

Sample Essay

Usually, the Social Security funds are specially invested in the federal securities and in long-term bonds. However, in 1997, there was a government advisory panel proposal which required that some of the revenues should be invested in bonds and stocks in order to generate higher earnings. Although this seemed a good idea, the panel was highly divided over the decision whether the money was to be invested by individuals or government. There was a disagreement on the money which was to be shifted from government bonds.

The two approaches by the different sides of the panel had their critics. Some critics regard the government investment in form of stock as a viable source of intrusive federal influence on the business activity in the U.S. yet still, other people feel that allowing the investments of the Social Security funds by individuals will greatly endanger the minimal postretirement safety net for every worker who the program is designed for should the individuals unwisely invest. The issue of personal Social Security accounts received a tight campaign from President George W. Bush.  A commission offering numerous options for permitting individual investment in stocks and bonds was appointed by the president serving as an annex to the Social Security program and also to secure the financial health of the program (USA.gov, n.d). Experts determined that the program would take over $3 trillion of extra revenue in the next 75 years and prospected that the benefits that were to be reduced in accomplishing both goals.

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