Allan Sloan praises General Motors.

the company traded that implicit pension obligation for explicit debt with an interest rate of 7.5 percent and an average maturity of 19 years…

GM says that without the big 2003 deal, it would have had to contribute $3 billion annually to its pension funds. Now it won’t have to put in a penny for years. So even after paying interest on its huge borrowing, GM’s cash position is $2 billion a year to the good. The gamble looks brilliant now

That “brilliant” substitution of explicit debt for pension obligations is exactly what reformers advocate for Social Security and what opponents of Social Security reform condemn as “transition cost.” See Social Security’s Worn-out Roof.

Speaking more directly about Social Security, Jagadeesh Gokhale writes,

First, postponing reforms that fix the system’s financial shortfall would be a mistake. Second, addressing solvency by hiking taxes under the current set of Social Security institutions would be an even a bigger mistake: Those institutions won’t save any additional resources devoted to Social Security. The value of a properly crafted personal accounts system would be in its ability to genuinely save and invest funds meant for Social Security.

In other words, private accounts are the ultimate lockbox.