Arnold Kling offers A Solution at the Stroke of a Pen:
Some problems are hard. Iran. Health care. Global warming. The proposed solutions to these problems typically are painful. People do not like painful solutions, and so little gets done. Perhaps this is for the best, given all of the uncertainties involved.But there is one problem that is easy to solve. The specter of future entitlement shortfalls could be eliminated with the stroke of a pen.
The problem is that Social Security and Medicare payments are on course to rise to unprecedented levels as a percent of GDP.
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The solution, as I have argued for several years, is to raise the age of government dependency for workers now in their 30′s and 40′s. This is a painless solution, because (a) it does not affect anyone who currently receives our is counting on government entitlements and (b) it does not really affect people now in their 30′s and 40′s.For people in their 30′s and 40′s today, the age of government dependency is only a promise. As of now, projected entitlement benefits to young workers are only promises that, under conservative assumptions, the government will be unable to meet. If the assumptions pan out, then the actual benefits that young workers receive when they finally retire probably will have to be reduced. It seems to me that young workers are no worse off if their promised benefits are reduced now (by raising the age of government dependency) than if their actual benefits are reduced when they reach their late 60′s. In fact, they probably are better off knowing the score now, when they can do something to accumulate personal retirement accounts, then thirty years from now, when it is too late.