Borrowing to Invest in Stocks Cannot Rescue Social Security, Study Shows

A leveraged wager on the stock market will not solve Social Security’s funding crisis and would likely saddle future taxpayers with debt, according to a new report from the Center for Retirement Research. The analysis simulated a proposal from Senators Bill Cassidy and Tim Kaine to create a $1.5 trillion fund using borrowed money, then invest it in equities to close the program’s long-term shortfall. The study found the plan would require total borrowing of $26.6 trillion over 75 years. Even if stocks delivered a strong 6.5% real annual return, the loans would be fully repaid only about 40% of the time. Under lower returns, outcomes deteriorated sharply, leaving heavy debt and interest costs. Researchers also flagged risks from market volatility, political meddling, and potential government ownership stakes large enough to disrupt market stability. A more viable path, the report notes, would be immediate tax increases or benefit cuts that eliminate the 75-year deficit, after which a 40% equity allocation could reduce future adjustments. However, co-author Anqi Chen warned time is running out: waiting until 2034, when the trust fund is depleted, would make even equity diversification an unlikely permanent fix.