Investment policies and procedures of the social security trust funds.

In this article, the Deputy Commissioner of Social Security for Programs describes the policies and procedures that have been followed in investing the assets of the Social Security trust funds, explores possible alternative investment areas, and counters criticisms of investment results and maturity durations. The author's analysis shows that a departure from the current practice of investing most of the assets in long-term special issues of Federal debt would have adverse consequences for the private industrial economy, the Treasury Department, or the economy in general. He notes that, although the interest income of the trust funds in 1980 amounted to only 2.46 percent of the Social Security program's total income, the amount involved--$3.85 billion--was 1.5 times as large as total administrative expenses.