All the developed countries in the world today face a common problem: They have promised more than they can deliver. In the United States, the worst examples are Social Security and Medicare.

How can we solve these and other problems of ill-conceived social insurance? An essential strategy is to change government programs in ways that reduce the costs to taxpayers while making no one worse off.

Here are a few examples I discuss in my Independent Policy Report Better Than Government: A New Way of Managing Life’s Risks:

• Old-age Benefits. Why not allow anyone to opt out of Social Security and Medicare provided they have other means of meeting their individual and family needs? Alternatives could include a government-insured private pension or a promise of post-retirement health care from a city, a county, or some other employer. If these choices reduce the expected burden for other taxpayers, opting out would be a win/win proposition.
• Unemployment Insurance. Our current system is horribly inefficient. Why not allow employees and their employers to find better private alternatives? In Chile, for example, workers contribute a small per- centage of their wages into an individual account. During a spell of unemployment, they can use the funds to cover living expenses, job-search expenses, and retraining.
• Veterans’ Affairs. Many veterans prefer to see private doctors rather than VA doctors. Unfortunately, VA pharmacies, whose drug prices are often lower, are allowed to fill only prescriptions written by VA doctors. Why not allow them to use prescriptions from private doctors? This would help the vets and reduce stress on the VA system.

Because government inefficiency is so prevalent, I believe there are thousands of opportunities to enact win/win reforms. But change won’t come easily. Washington is dominated by a zero-sum mentality that cannot fathom winners without losers.

The challenge before us, therefore, is to inspire people all along the political spectrum to consider the win/win approach and experiment with reforms that empower citizens to better chart their own course.

We have much to gain and nothing to lose. Those are odds everyone should like.