Greenspan Blew Chance to Fix Social Security

The key line: "Net interest."

When you compare the net interest earned each year with the average assets in the fund during that year, you realize the alarming truth. Since 1984 your Social Security payments have been averaging, compounded, about 7.6% a year.

Wall Street over the same period: about 13% a year. That's from the S&P 500.

Remember, we're not even talking about the kind of superlative returns that, say, Jack Meyers was able to get for the Harvard University endowment, or Warren Buffett produced at Berkshire Hathaway(BRK-A Quote).

We're just talking about the kind of returns anyone could have got from a simple Vanguard index fund.

Anyone, it seems, but Uncle Sam.

How big a difference would this have made? The numbers are startling.

Under the current system, Social Security by the end of last year had accumulated $2.048 trillion in assets.

But if the fund had been earning the same returns as the S&P index over the past 24 years, calculations show its assets today would be $3.013 trillion.

You read that right: a trillion dollars more.

No, it wouldn't have eliminated the funding crisis. But we'd be in a lot better shape today.

When you're running out of money, every trillion counts.