I just said that obligations like Social Security are real, not nominal, obligations. Therefore it is difficult to inflate them away. Jakke added to default discussion by pointing out that methods of dealing with such problems are likely to be hybrid approaches. That reminded me of this post on Pension Pulse.
There are different ways to account for increases in the cost of living. A defined benefits plan such as a pension plan (or Social Security) is usually indexed to the cost of living. By changing the index, checks against inflating away the obligations can be reduced. The US has played similar games in the past. They likely will in the future. I’m a little surprised to see the UK playing these games now.
