A third choice is take the whole thing private. Many countries have privatized their retirement systems. They've found that this approach provides workers with a better return than a government pension, and increases saving and investment, making the economy grow faster. Some think tanks and lawmakers have suggested privatizing Social Security, but the approach has yet to gain strong momentum. The problems seems to be that deep reform is difficult at the federal level.
Politicians are just too scared to do anything with the popular program.
But reform may come from the bottom up. That's the approach Oregon has taken. The state has already gotten waivers from the federal government to shape its own welfare and Medicaid systems. Now it has asked for that same freedom to design a retirement system for Oregon workers. Backers say that this is the first step in getting Beaver State workers into private retirement systems.