WHERE'S PAUL O'NEILL WHEN WE NEED HIM:

Turn America into a nation of savers: Smart policies could make savings, not consumption, the new norm. (Reid Cramer, November 9, 2009, CS MOnitor)

There is much promise in having savings deposits deducted from paychecks as a matter of course, as they are under 401(k) plans. Such a policy, call it AutoSave, would strategically build on inertia, which, it turns out, is one of the most powerful forces in the universe, along with compound interest. Unfortunately, only about half the workforce currently takes advantage of 401(k) plans with these automatic features, mainly because their employers do not offer them. The Obama administration has proposed remedying this by providing all workers access to a central clearinghouse of savings plans that they could access. It is certainly a step in the right direction, but we should also think more boldly.

What if, for example, the federal government established an account for every American, including children? These lifetime savings accounts could even be started at birth, so children would already have their own account when they reach school age and are ready to learn the value of savings and the basics of financial education.

Working adults could have a small portion of their paychecks, tax returns, and other government payments automatically deposited in these accounts and invested safely. People could always opt out and make withdrawals from their accounts, (with perhaps some funds locked away for special purposes such as education or retirement), but they would have to overcome the natural inertia of human nature to do so.

The UR could salvage his presidency if he and the GOP Congress finish the Ownership Society.

Posted by Orrin Judd at November 12, 2009 9:00 AM