Weekend 8/3/2025
Social mood theory, points ot that maximum mood occurs at the end of a move. At market tops we have a buying blowout, at bottoms a selling blowout.
And big projects are a signature evt of a market top. Now two Senators embrace the idea of putting the future of SS into the stock market rather than those low yielding T bonds. No Senator would have suggested this at the dot.com 2002 market bottom, not at the March 2009 real estate bottom, when billons of value had been wiped out. But with new highs in major indexes, why not, no one loses money n the stock market! And of course the idea is endorsed by a Harvard Professor, emeritus no less.
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ndrew Biggs’s “A Risky Plan for Social Security” warns that the bipartisan reform plan to provide long-term solvency for the Social Security system proposed by Sens. Bill Cassidy (R., La.) and Tim Kaine (D., Va.) is too risky (op-ed, July 25). But the Cassidy-Kaine plan is much less risky than ignoring Social Security’s current $25 trillion funding gap and allowing its trust fund to be depleted by 2033.
Messrs. Cassidy and Kaine based their proposal on extensive evidence that diversified investing produces much higher long-term returns than reliance on low-yield Treasury bonds.
Their plan would create an independent and professionally managed fund with a fiduciary duty to manage returns and risk conservatively across diversified asset classes over decades-long investment periods.
Contradicting Mr. Biggs’s assertion about possible political manipulation, the fund would have clear statutory guardrails, including an independent board to avoid political pressure for preferential or unacceptable investments that would jeopardize earning the best risk-adjusted returns.
No single solution will restore solvency to the fund, but the Cassidy-Kaine plan offers the opportunity for constructive dialogue and debate on politically feasible solutions to protect current and future Social Security beneficiaries.
Ignoring this opportunity is what’s truly risky.
Robert S. Kaplan
Prof. emeritus, Harvard University
Professor Elam 
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