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est more notional than real.  When the time comes that

payments must be made from the trust fund, the federal

government will have to appropriate the attributed interest

from general revenues.  Thus, like the government securities

themselves, the interest payments do not represent real

current wealth, merely a promise by the government to tax

future generations of workers.  In contrast, if the govern-

ment invested in equities or other assets outside the gov-

ernment, any return would result in a real increase in the

system's assets.

7.  Congressional Record, Vol. 81, Part 2, 75th Congress

(March 17, 1937), p. 2324.

8.  Report of the 1994-1996 Advisory Council on Social

Security, Volume I: Findings and Recommendations (Washing-

ton: Government Printing Office, 1997), pp. 25-28.

9.  Peter Passell, "Can Retirees' Safety Net be Saved?" New

York Times, February 18, 1997.

10. Theodore Angelis, "Investing Public Money in Private

Markets: What Are the Right Questions?" Presentation to a

conference on "Framing the Social Security Debate: Values,

Politics, and Economics," National Academy of Social Insur-

ance, Washington, D.C., January 29, 1998.

11. Quoted in Michael Eisenscher and Peter Donohue, "The

Fate of Social Security," Z Magazine, March 1997.

12. U.S. House of Representatives, Committee on Education

and Labor, Subcommittee on Labor-Management Relations,

"Public Pension Plans: The Issues Raised over Control of

Plan Assets," Committee Print, June 25, 1990; U.S. House of

Representatives, Committee on Education and Labor, Public

Pension Plans: The Issues Raised over Control of Plan As-

sets, p. 49.

13. Ibid.

14. General Accounting Office, "Social Security Financing:

Implications of Government Stock Investing for the Trust

Fund, the Federal Budget, and the Economy," Report to the

U.S. Senate Special Committee on Aging, April 1998, p. 62.

15. Ibid.

16. Our Money's Worth: Report of the Governor's Task Force