To fix Social Security, we should first stop using the Consumer Price Index to adjust benefits for inflation. Using the C.P.I. overstates the impact of inflation and has also led to larger increases in benefits for Social Security recipients than the income gains of typical American workers.

Thanks to decades of accumulated federal budget deficits and, more significantly, imprudent Medicare and Social Security policies, we've stolen almost $60 trillion from our children.

The weak economy, widening income inequality, gridlock in Congress and a presidential election: Those were perhaps the dominant economic and political themes of 2012.

Finally, let's keep well in mind the most important lesson of the auto rescue: While government should stay away from the private sector as much as possible, markets do occasionally fail, and when they do government can play a constructive role, as it did in the case of the auto rescue.

Well, maybe not death panels, exactly, but unless we start allocating health-care resources more prudently – rationing, by its proper name – the exploding cost of Medicare will swamp the federal budget.

Neither the George W. Bush nor the Obama administrations volunteered to bail out G.M., Chrysler and other parts of the auto sector. Both subscribed firmly to the longstanding American principle that government should resolutely avoid these kinds of interventions, particularly in the industrial sector.

Conservatives brayed that government should stay out of the private sector; liberals bleated for nationalizing the banks.