Such a wager could change the dynamics of the debate on Social Security reform. Suppose the Democrats refused such a wager. They would face criticism for refusing to believe their own advertising, and having little faith in their own policy proposals. However, if they accepted the wager, the private accounts would surely come out ahead in the long run. This would visibly demonstrate the benefits of privatization in a way that is easy to understand and would advance the prospects for reform.
It should be noted that advocates of liberty have used high profile wagers to their advantage in the past. For instance, one of the most famous took place in 1980 between economist Julian Simon and biologist Paul Ehrlich. Ehrlich, author of “The Population Bomb,” was an advocate of government‐mandated population control. He was convinced that overpopulation would cause the world to exhaust its supply of natural resources. However, Simon had a different view. He felt that increases in human ingenuity would increase the supply of many commodities, resulting in greater abundance for all.
During that time the academic community was enamored with Ehrlich, and Simon found it difficult to get people to consider his ideas. As a result, in 1980 he proposed a wager, which Ehrlich quickly accepted. Ehrlich got to invert $1,000 in any five natural resources. If after 10 years the resources became more scarce and prices went up, then Simon would pay Ehrlich the difference. However, if resources became more abundant and prices went down, Ehrlich would owe Simon the difference. Indeed, by 1990, the prices on each of the five commodities went down and Simon pocketed a cool $567.07 from Ehrlich. While Ehrlich to this day downplays the importance of the loss, Simon’s successful wager did generate some publicity and gave his ideas greater credibility.
Something similar could happen with Social Security reform. A wager would for once put the Republicans on the offensive on this issue. It would facilitate debate and discussion as people could see the tangible benefits of private Social Security accounts. Finally, the Democrats would be left with fewer resources to air their misleading attack ads around election time.