It seems to me that Social Security reform can go nowhere until there's debate. And debate doesn't mean much until there are options on the table. Were I in Congress, I'd set up three commissions, each to propose a different solution to Social Security's financial instability. Then I'd go back to my constituents and demand that they choose. Demand that they debate.

Here are three proposals, for your consideration:

1. Privatization: Figure out a way to privatize the whole kit and kaboodle. I'm afraid this would have to be a multi-staged, and therefore a very complex proposal.




2. Fiddle with the demographics: Increase the retirement age by at least five years. After all, the original system was designed when people lived not nearly so long. It was designed like a tontine, in a sense, a key feature of which is that a huge percentage of contributors were expected to die before they could collect on their pensions. Return to that model. For further kick to the system, open up the borders to all able-bodied English-speaking people under thirty. Make them pay into the system even if they do not seek citizenship.




3. Tontinize: Set up government-supervised tontines and retirement insurance, and force every person over 23 to participate (or some other low age; basically, young people have to spend their money in education, so they need to be given a reprieve before they start the retirement racket). The tontines should be a minimum of 40-year plans (50 years would probably make more sense for the very young, after transition), and the insurance packages should also target generations, peer groups, not the individual as such, regardless of age.

The key to all these proposals is actuarial soundness.

You should be able to tell whether your disputant is arguing responsibly or not by his (or her) understanding of actuarial tables and the nature of risk and uncertainty.

Almost certainly freedom not to participate in a chosen program could not be optional, in the current context. People are too afraid of their neighbors' folly to allow for a full freedom. Too bad.

But really, the most important thing is to show the people real options. There should be a four-year national debate. Using realistic options. At the end of the period, a special constitional convention (not Congress!) should finalize a mostly-settled-on proposal and offer it to Congress.

Of course, to do this we really would have to revise Article Five of the U.S. Constitution, on the manner of setting up a Constitution Convention. Would Congress go along with a more democratic system? Probably not.

Congress also probably has no interest in a real national debate on this issue.

Neither would Congress likely be amenable to offering citizens a choice, as ongoing policy. I can imagine the Constitutional Convention coming up with a packet for anyone to choose. Tontine? Or simple privatized investments? One or ther other would be mandatory, to an amount specified by Congress.

But that kind of freedom seems unlikely: Modern politics is geared towards one-size-fits-all approaches, more fool modern man.

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