83 Cents on the Social Security Dollar? Where Do I Sign Up?

Alex Pollock has crafted a plan to un-screw Social Security so simple, straightforward, and obviously beneficial that there's a virtual guaruntee that Congress will never consider the measure. It begins with a sound statement of reality:

If a debt cannot be paid, it will not be paid—at least not paid in full.

Everyone who has ever declared bankruptcy or dealt with a credit counseling firm knows this to be true. There is a point where liabilities stretch beyond future earnings. We have either hit this point already or sailing in full-steam, damn-the-torpedoes mode towards it.

Here's the plan:

You could stay in Social Security as it is. Or you could elect to settle for 83 cents, paid in U.S. Treasury inflation-indexed bonds, which you would own outright. These bonds, with all future interest payments on them, would constitute true retirement savings, protected from inflation.⁶ In exchange, you would forego formula benefits equal to the value of the bonds you received divided by 0.83. You would have made up your own mind about the chances of such promised Social Security benefits actually being paid.

I'd take it in a New York minute. So would most people, and every time that happens, Uncle Sugar finds his liability decreased. The essence of trade: both sides benefit.

So what's to stop it from happening? The greed of politicians for control over the lives of its citizens; the hunger to be seen as the cornucopia from which all good things flow. Why, if people have their own assets, we don't need to save them from themselves! Then what the hell are we going to do?