You lend our bankrupt federal government your retirement savings; the government then spends your money and gives you an IOU for future payment. No actual savings fund is ever established. Huh? Sounds nuts, doesn’t it? Well the sad news is this is just the retirement scheme our delusional president has cooked up and served blue-plate style to aghast citizens. Here Cato Institute’s Mark Calabria succinctly lays out the horror of MyRA.
President Barack Obama recently unveiled MyRA, a savings plan to allow Americans without employer-provided retirement accounts to invest in U.S. government bonds. His desire to improve the public’s meager personal savings rate of around 4 percent is laudable, but MyRA misses the mark. In fact, it pushes investors toward what is basically a government-run Ponzi scheme.
Here’s how MyRA would function: Workers living in households earning up to $191,000 and without access to employer-provided retirement would give some portion of their after-tax paycheck to the federal government. The federal government would then spend that money, giving the saver a “promise” of repayment in the future. In other words: MyRA investors would be giving the federal government a loan.