"The Great Risk Shift"

According to political science professor Jacob Hacker in his book The Great Risk Shift the United States has seen a big increase in risk for its ordinary citizens in recent decades.
According to Brink Lindsey, Hacker argues that the culprit is

America's sweeping transformation away from an all-in-the-same-boat philosophy of shared risk toward a go-it-alone vision of personal responsibility...


Over the last generation... we have witnessed a massive transfer of economic risk from broad structures of insurance, including those sponsored by the corporate sector as well as by government, onto the fragile balance sheets of American families.

Let’s accept his statement. There has been a reassignment of risk from corporate and government structures to individuals and families. you can tell that for Hacker it goes without saying that this is a loss. But is it?

After all, we now know that the reason that the transfer has taken place is because the promises made by corporations and government were empty, and made reckless assumptions about the future. Once proud corporations with magisterial defined-benefit programs are now broke and cannot perform their promises. The same is true of government. Social Security has a $10 trillion unfunded liability and Medicare has a $60 trillion unfunded liability.

Hacker’s solution is to move to an “‘insurance and opportunity society,’ that would safeguard economic security and expand economic opportunity, ensuring that all Americans have the basic financial security they need to reach for and achieve the American Dream.”

Sorry to butt in, Jacob, old chap, but wasn’t the welfare state supposed to do all that? Isn’t it supposed to be doing that at this very moment? So why do we need to butt in with a whole new program?

Tenured college professors like Hacker often don’t understand how risk operates. For instance, for an individual or a family is it better to trust to a corporate pension plan and a government program for their security, which means in effect giving some of their wage income to a corporation or government in exchange for promises? Or is it better to keep the money and send it off to Vanguard or Fidelity to be invested in stock and bond funds? In which scenario are you “putting all your eggs in one basket?”

Anyway, given that the corporate pension funds are all tapped out and the government’s entitlement programs will need huge tax increases to make good their promises, where is the money going to come from to provide the “insurance” that Hacker is calling for?