Universal Savings Accounts
By Arnold Kling
Tyler Cowen endorses the idea, with a twist.
Just as the earned-income tax credit pays poor people to work, the universal 401(k) would pay poor people to save…
There is an obvious way to pay for a universal 401(k) plan. For every dollar spent on the universal 401(k), the federal government could spend one dollar less on Medicare and Social Security benefits.
Economically, linking reduced benefits to greater saving is sensible. Politically, it is a poison pill. I would be happy to see the savings accounts instituted first. The cutbacks in future entitlements are inevitable–no need to “blame” them on personal savings accounts.