Pension Investment

* In “Washington Shouldn’t Be on Wall Street” (Commentary, Jan. 29), Martin and Kathleen Feldstein state that the federal government should not invest surplus funds in the stock market because they would have an undue influence among other investors. I agree. However, I feel that some means of increasing the yield of these surplus funds should be utilized.

I suggest that investing in VA and FHA single-family mortgages would be a win-win situation. It would provide a good yield with very low risk, while encouraging homeownership.

The federal government already insures these loans and the commercial banks and savings and loan institutions that presently fund them have been given a much wider latitude in their choice of investments. To wean them off these loans, the government could pay them a small fee for instituting and servicing them.

With a very low estimate of yield of 5%, the principal would double in less than 15 years. Enough to keep the fund solvent for quite a while.

BYRON SLATER

San Diego