Introduction

This study is about one of the world’s largest investment funds, the Trust Fund of the Social Security System of the United States. Hundreds of millions of people have made contributions to it over three quarters of a century. A very large number of the people who have paid into it have also received, or are receiving, retirement benefits, disability payments, or the proceeds from life insurance sent to their next of kin; all others who have made and are making contributions can expect these same types of benefits in the future.As of December 21, 2010, the Social Security Trust Fund had assets of $2.609 trillion in the form of non-marketable Special Issue Government Bonds and no debts. Of this amount, total inflows to the Trust Fund in the form of payroll taxes exceed benefit payments and administrative expenses in the sum of $1.144 trillion. Consequently, the Trust fund’s accumulation of earnings, in the form of interest income, over its first 74 years of existence, adds up to only $1.465 trillion. As of this writing, the Social Security Trust Fund has never invested a penny in stocks.