From today’s New York Times, an op-ed by two academics – a law professor and an economics professor – offers a unique proposal. Their column is titled Paying for Old Age. They propose government-issued annuities which could be as attractive as those issued by insurance companies are not (AIG anyone?).
This new product wouldn’t cost the government a penny. In fact, the Treasury would benefit. It is only an incremental move beyond issuing inflation-adjusted bonds, which the Treasury already does. By allowing the government to tap a new class of investors, the cost of government borrowing over all would probably drop.