Chip in the hand? Cool, I'd do it in a heartbeat. WITH certain changes...
1.) ALL info in chip MUST match the body it's in (ie DNA, fingerprint, visible physical features, etc), there is no mistake you are you (chips registered to social security number and can only be gotten from secure companies, violators go to jail for life, it IS national security after all)
2.) Copies of the national database needs to be in multiple locations not only for safe storage/recovery, but for quicker access anywhere in the world.
3.) Additional data needs to be minimal (or extended as personal choice). In fact a 2-3 mode scanner would solve the problem, as long as severe penalties apply to corporations that violate privacy issues. Mode 1 is basic identity (going about town etc) Mode 2 is for hospitals/police only and access medical history (hence insurance companies would get put to the wall /out of business for using a mode 2 scanner illegally on perspective customers, and a mode 3 scan is for police/military only (complete history only used for booking, back ground checks for govt or police work).
If it was presented (and vigorously enforced) like that I would have no problem with this logical approach to BIG BROTHER (and I consider myself a liberal)
Imagine the first moron company to violate it and the feds bust down their door and seize their assets (since they are used in the participation of a crime) and inform them complaints have to stop cause they already have 12 thousand charges against them and if any more come in 24 hours + later they will be added..
We suggest you call a good lawyer...

The key is not "invasion of Privacy" but clear and precise usage of any such technology, the safeguarding of data, and MOST OF ALL extreme enforcement of this system.
Otherwise identity theft will be the joke it is now in the criminal justice system.
By the way just my suggestions:
A) Build a ****ing wall on the Southern Border with machine gun nests and night vision targeting.
B) Make the guards actually CHECK PEOPLE on the Northern Border (got way too friendly with the travelers) There's one spot with no guard, it;s an honor system you write in a logbook I think).
C) Bring back Ellis Island for Pete's sake, that's when immigration meant something and you found out who people were when they got here, not AFTER the fact they've been here awhile and someone notices them or they get picked up for a crime.
That might help a little to stem the tide of people needed a new identity if we find out who they are in the first place on day one!
(All children born in the USA from this day forward need a ID chip, an additional tracking one (GPS?)is optional and removed at age 16 - or if desired, you can say you want to keep yours

in case you get kidnapped..)