If you are referring to the government effectively borrowing money from it (as people say they currently do), yea, this absolutely should stop (unless they will pay a decent return).

Government bonds and other securities currently invested in by social security are not even making back inflation...that is just...sad.

It isn't at all unheard of for even public retirement plans to invest in stocks. Many city and state pension plans do.

People obviously have worries regarding the word pension because some are severely underfunded. This has a lot less to do with stock market volatility, and more to do with just plain bad actuarial assumptions regarding funding requirements etc.

Changing investments isn't the only solution, it's just the best in my opinion.

The majority of other solutions are effectively further tax increases (or benefit cuts) in order to finally get the system to balance. While these would likely work, it just makes the eventual payout of social security an even worse "investment" than it already is.

He's completely lost it. 

Simply, do you trust a government employee to do investment of your SS benefits when they do not have nothing to gain or lose compared to having it managed by a Profolio firm.  The currently system doesn't rely on that and who would they hire for this type of position.  Not sure why you brought up breaking laws and this angle, not really thinking along those lines.  I am thinking of competency.

As to the second paragraph, its the reason why the government isn't looking to go down this route because they cannot sell their crappy bonds that yield something around 2.5%.  Its how the government pays down certain debt so if there isn't a system to replace it, its probably not going to happen.

You are insinuating that buying index funds is...difficult and therefore I should trust that somebody does a good job of it.

It could literally be an automated program that just buys all shares of X index fund (there are hundreds of decent ones that accomplish the same thing). You really don't even hardly have to have any investment experience or knowledge of the market to accomplish this. I'm not suggesting this to operate like a hedge fund and to buy and sell individual stocks, try timing the market, etc.

It really isn't rocket science to "trust" somebody to buy index shares on the behalf of social security.

Who would they hire? The same people that are currently responsible for all of the bond buying should be more than capable of it. It's...so easy.

Do you feel there are any negatives in regards to the expanded role of government in the stock market?

For example, by creating a government system of private investment, you are creating winners and losers in the stock market, by benefiting the companies and shareholders who are involved in the companies which SS feeds into. This is essentially the government putting a finger on the scale of the free market.

Second, how would Social Security react to contractions in the stock market? Volatility can do a lot of damage to retirement savings accounts if someone retires during a recession. Social Security is designed to be a low risk supplement to retirement savings. Do payouts under your system decrease during a recession under your system?

Further, what is the point of Social Security under this system? Should it be replaced by automatic payments into a retirement savings account?

He also virtually eliminated guinea worm, an excruciatingly painful parasite from parts of Africa.  Don't know much about his politics, but he's definitely one of the good ones.

There are absolutely impacts associated with the government investing like this. Some could argue these are negative. I'm not going to pretend to understand every impact, but I do know there are inherent issues with having too many people invested in index funds.

How would it react to contractions in the market? The entire point of investing in the market like this isn't to just create this pool of cash that is technically owned by a person. I'm not suggesting that people get a payout at the end of their lives. I'm still suggesting that social security is more like a pension system (similar to now).

That being said, despite large stock market corrections, the stock market still averages 8-9% per year. Regardless of market corrections, you will never be able to find me a situation where an investment in government bonds was worth more than an investment in the broad stock market over 30-40+ years. Ever. The situation does not exist. It never ceases to amaze me this huge scare people have about how "risky" the overall stock market is because they see it drop 50% in a year (and proceed to ignore that a couple years later it has usually recovered all of this and some).

So to suggest that a stock market crash would ruin a system like this doesn't make any sense.