Econintersect: The U.S. Department of the Treasury is considering issuing a new class of bonds for retirement savings. The bonds would have the same tax status as IRA accounts and could be rolled into IRAs above some yet unspecified “critical mass” size. There are likely to be restrictions on who could participate. For example, only those who do not have company sponsored retirement plans, are not eligible for their employer sponsored plans or are self-employed are likely to be eligible.
The current activity was discussed last week by Mark Iwry, Deputy Assistant Treasury Secretary (Tax Policy) for Retirement and Health Policy. Iwry was delivering a keynote address at the Annual Women’s Retirement Symposium of the Women’s Institute for a Secure Retirement (WISER), 24 October 2013 in Washington, DC.
According to an article in Financial Planning, Imry said no congressional action is necessary to start issuing the new class of bonds.
This proposal satisfies a fundamental function for government debt. Warren Mosler, for one, has pointed out:
…the non government sector requires government deficit spending to satisfy its net savings desires, should there be any.
and
Additionally, note that all government spending is either used to pay taxes or remains as net savings in the economy, in one form or another.
The latest considerations by Treasury are a continuation of efforts to increase retirement savings opportunities for lower income workers which were outlined by Assistant Secretary Michael S. Barr at the Apsen Institute in 2010.
Sources:
- Annual Women’s Retirement Symposium (Women’s Institute for a Secure Retirement (WISER), 24 October 2013)
- Retirement Bonds On Front Burner Of Treasury Department (Ted Knutson, Financial Advisor, 30 October 2013)
- National Government Debt Dynamics- Causes and Policy Options (Warren Mosler, GEI Opinion, 03 October 2012)
- Hill Briefing on Tapping Tax Time (Michael S. Barr, Press Release, Speech at the Aspen Institute, 23 September 2010)
