Amity Shlaes does us all a favor by reminding us of the actual purpose of social security: in FDR's words, to provide "some measure of protection to the average citizen and to his family." That's it. Not total security. Not a total guarantee that the gold-plated benefits of the late-century will keep growing and growing. And not a peg to wages rather than prices, linking retirees to current wage-earners rather than actual needs. I agree with Amy that the obvious, simplest reform to keep social security solvent is to remove the peg to wages, and keep it indexed solely to price inflation. She rightly points out the trade-off:
The peg adjustment would make Social Security a smaller part of Americans' retirement package a few decades from now. It would also erase at least two-thirds of the shortfall.
But how many of us in our thirties or forties expect social security to be as it once was when we retire? I'd rather settle for a lower sum because we planned for it than because we let the system collapse into insolvency.