The Ultimate Identity Theft Prevention Plan
It seems to me that we'd go a long way in fixing identity theft if we stopped treating knowledge of personal info as proof you are that person. My cable company uses my social security number as "proof" that it's really me - but god only knows how many people know my social security number. My bankers, my employer (and everyone who can touch the payroll system) my doctors office, my insurance companies. The list is very long.
It should be illegal to use the SSN as a shared secret, and anyone who does use it as a secret identifier should be liable for any expenses they incur. VISA would be a lot more effective at combating fraud if they had to pay for every false credit card opened in my name.
Even better, if we didn't have to treat SSNs as secret information anymore, it'd make our lives a lot easier. The SSN is a great primary key for me - it's one number I can remember, and it does a good job of uniquely identifying me. I want to be able to give it to more people.
If Congress really can act quickly when it wants to, a good way to bring this about is to require all members of Congress to publicly disclose their SSN on January 1st 2008.