With This Bold Move Avoid A Recession And Save Social Security…

It’s time for a Cure For America.

The COVID-19 crisis has created a huge opportunity, maybe a once in a generation chance, to align all our efforts, monetary, fiscal, business and personal for a “cure” — not just for the pandemic but create a financial cure for Social Security.

It’s only a matter of time before scientists find a cure for COVID-19. Driven by the desire to serve (and make a fortune!), companies around the world are competing to create a solution.

But how will we find a cure for the massive economic impact caused by the pandemic and the lockdown?

The sudden healthcare and financial crisis has negatively impacted millions of people’s employment and retirement funds. Even worse, people who are unemployed or laid off don’t accrue benefits in Social Security and can’t contribute to their 401(k) plans.

We all know that the Social Security system has been in trouble for decades. This crisis makes things even worse as even more people will become dependent on Social Security going forward.

Washington’s response to the virus’ disastrous effects to the economy, the “cure” for the Covid-19 induced recession, is called Quantitative Easing. QE hopes to prevent the spread of an economic malaise by having central banks, in this case the U.S. Federal Reserve, purchase financial assets to inject cash and liquidity into their economies.

Equally important is to create a mechanism for these financial assets to be priced at fair market valuations during this crisis of liquidity and panic selling.

I propose to deploy this QE strategy through the Social Security Trust Fund, so that the economic recovery and it’s benefits or profits on the QE asset purchases be given to the next generation of retirees. Instead of the Fed buying assets directly, why not have the Social Security Trust Fund issue bonds?

Let’s call these bonds the “Cure for America” Bonds. We’ll let the bond experts chime in on how to structure them effectively. Next, order the Fed to buy these “Cure Bonds”, effectively placing the stimulus money into the Social Security Trust Fund.

Then, have the Social Security Trust Fund implement the quantitative easing by purchasing stocks and bonds, effectively investing in America’s best and brightest businesses and their workers. Yes, that’s right, buying stocks! Imagine that, a retirement fund buying stocks, rather than being restricted to buying just government bonds.

We now have “ring fenced” the intent and benefit of these stock and other asset purchases, and most importantly the accountability of the “bailout” to something tangible and measurable.

With these assets inside the Social Security Trust Fund, they will singularly and boldly safeguard the future of American retirees. This might even be the long-awaited cure for Social Security‘s massive underfunded status. Two birds with one stone!

Over a long period of time, very appropriately for the Social Security Trust Fund, a return on these purchases will be far better than what they had invested in the past. Right now, because of a 1930s-era rule, the SSTF can only invest in low-return government securities. This new portfolio can be managed over a much longer time frame and the “Cure” bonds can be redeemed and the Fed can be made whole.

And let’s face it, the record for long term stocks is indisputable, $1000 invested in 1928, today would be over $6 million, despite the great crash of 1929, the Great Depression, World War II, the crash of 1942, Black Monday Crash 1987, Asia Financial Crisis 1992, Tech Wreck of 2000, SARS , and the Great Recession of 2007–08.

In this case, the FED is truly a lender and the Social Security Trust Fund is truly a long term investor. Many moral hazards are to be dealt with in this solution, but it’s evident that it is a cure for the generations that can solve our financial problems now.