Bitcoin does solve it (or, rather, people holding their savings themselves instead of lending them to a centralized intermediary does solve it). When everyone's savings are in the bank, you only have to use the $5 wrench on a single bank executive to take a million people's money. When everyone's savings are in their own possession, you have to use a million $5 wrenches on a million people, one at a time, to take their money, and you don't initially know which of those people has how much money.

I mean, yes, the government can still probably take your money, or for that matter kill you with impunity. But it's a good idea to put some obstacles in their way that aren't merely procedural.

the 5$ wrench in this case is not a good analogy because there is no way to know who own a bitcoin wallet. Thus you don’t know who you should use the 5$ wrench on.

That's probably overstating the degree of security Bitcoin gives you in practice, but it's likely better than having a centralized list of names and account numbers.