Government-backed retirement accounts

Here we go again. Every so often a really good idea comes out of the government that could truly help Americans, only to be revealed, upon closer inspection, to be a disappointment. This time it’s President Obama’s MyRA starter account proposal. On the surface this seems like a great idea – a retirement account that is secure from the gambling and fraud of Wall Street. Currently, what refuge is there for regular (non-rich) Americans to keep their retirement money safe? Pensions have nearly been eliminated. What pensions that still exist are being bankrupted on, whether they’re private, corporate pensions or public municipal pensions. State pensions are under threat of being dissolved. In 2008, we watched in horror as thousands lost their life savings in 401k plans. Are people supposed to work and save their whole lives only to die broke because of the gross negligence of investment firms who scoff at any fiduciary responsibility they might have to the people who’ve trusted them to grow and protect their savings?

When I first heard President Obama speak of a government-backed retirement account, during his State of the Union address, I thought “Wow, finally there will be a sensible and secure option for people like myself who hate the idea of being forced to hand over my hard-earned money to jokers in the financial industry who have every motivation to gamble away your money and zero culpability if they fail.” Yet, as I read more about the MyRA plan, my hope that a safe retirement account alternative was near immediately faded away. Apparently, the MyRA is only government-backed until it reaches $15,000, where it is then rolled over into a traditional IRA, without any government protection. Who can retire on $15,000? This scheme is just another mechanism for Wall Street to milk more money out people who haven’t been saving in the past, so investment firms can continue their gambling addiction. If the president was serious about a government-backed retirement account, then why not allow citizens to add money to their Social Security accounts? What could be safer than that? Why set up a ruse that the government will protect your “retirement” money, when the government is really not doing that at all? It’s only protecting a starter account, temporarily.

Once again we see government being used to benefit the rich further – only interfering enough to redistribute wealth from the lower class up to the wealthiest, while we’re left to fend for ourselves in retirement at the mercy of a volatile marketplace.