Privatize This!

Okay, I chose the headline above just to get your attention. I actually don’t have a very strong opinion about the Social Security kerfuffle that Instapundit notes seems to be everywhere. I just have one modest proposal (and I mean that for once). What if the privatized portion of Social Security retirement accounts was insured against catastrophic loss by the federal government roughly in the manner savings accounts are? This insurance, if used, would be pro-rated and disbursed on a monthly basis like normal Social Security payments. Retirees would then be protected, to a certain extent, against the extreme vicissitudes of the market. The upside would start to outweigh the downside, perhaps significantly. Even so, this proposal would still be contingent on strict regulation on the type of retirement investment allowed (no investing in blogs, except this one). I admit this is a fairly obvious idea many people must already have thought of, so I wouldn’t be surprised if there were already strong counter-arguments.