consider the nuance:
returns only slighty better than the ultraconservative figures assumed for discussion purposes today would greatly ease the consequences of progressive price indexing or any other means of addressing the actuarial deficit
if the returns are worse, we'll be fully socialist before any of this even matters and after much blood in the streets
The figures are not ultraconservative. They assume a return equal to the 5 year treasury bond rate, which is of course a very low risk rate. The proposal as I understand it is to have private accounts borrow at 3% over inflation against the balance of their "traditional" SS benefit, a bit higher than the five year treasury bond rate, and to invest in stocks at a 100% margin (investing in bonds would not move the ball, except perhaps slightly backward if anything for the recipient). If stocks do not generate lower rather than returns higher than 3% over inflation, the recipient will be worse off. But Uncle Sam will be there, if it is much worse off. Thus the moral hazard.