October 19, 2004

Raising Your Own Retirement Age

Brad Delong is worried that Congress will inevitably allow people to borrow from their retirement accounts, some of that money will never be paid back, and the taxpayers will be back on the hook, having given tax preferences for the money once and still having to pay for that person's retirement again. The solution is simple, just back load some penalties. If you don't pay back your retirement account loans, add some years to the individual's retirement age. People will still take out loans but withholding government subsidized old age goodies saves the taxpayers money and provides a punishment that fits the crime, added work responsibilities to compensate for financial irresponsibility in retirement accounts. You could even change the enforceability of private retirement goodies in the courts, shifting "senior citizen discounts" and private pension payouts out by the requisite number of years. In short, the DeLong objection could be met in the normal legislative process in a way that is consistent with social justice.

HT: Marginal Revolutions.

Posted by TMLutas at October 19, 2004 09:34 AM