State of the Union

Who Is This Myra Lady and Why Does She Want My Money?

President Obama proposes a federally managed retirement program.


Pictures of Greek ruins are what you get when you Google "Myra." Isn't that interesting?
Credit: / Foter / CC BY-NC-SA

I spent the State of the Union Address high on the CVS generic version of NyQuil (not as part of Peter Suderman's drinking game, so it wasn't even fun). Most of the speech was a blur to me, other than a brief bit of rage when he described his murderous use of drones as "prudent."

Nestled into the seemingly neverending speech was the introduction of some lady named Myra. She was going to help Americans save money for retirement. Now that I'm off the drugs, I see that he is actually referring to a new federally operated savings program. Here's the text from the speech:

Let's do more to help Americans save for retirement. Today, most workers don't have a pension.  A Social Security check often isn't enough on its own.  And while the stock market has doubled over the last five years, that doesn't help folks who don't have 401ks.  That's why, tomorrow, I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It's a new savings bond that encourages folks to build a nest egg.  MyRA guarantees a decent return with no risk of losing what you put in.  And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle-class Americans.  Offer every American access to an automatic IRA on the job, so they can save at work just like everyone in this chamber can."

I am a middle-class American, and my bank is constantly asking me if I want to open up an Individual Retirement Account with them, so I'm a little skeptical that people aren't saving for retirement because they just don't have access.

There wasn't much information about this plan last night, but this morning Josh Barro at Business Insider offered an explainer. He says, "MyRA would be a program of small Roth IRAs with access to a special, safe investment that pays a little better than Treasury bills. Remember, a Roth IRA is a retirement account where you contribute after-tax earnings, and can then withdraw money in retirement without ever paying tax on your investment returns."

It does seem like a modest plan, compared to something like Iowa Sen. Tom Harkin's proposal to create a national retirement pension system (pdf).  

But this program will have costs. Barro calculates: "Essentially, instead of issuing short-term Treasury bills at almost no cost, the federal government will do a little bit of its borrowing through this G Fund-like security, paying an extra point or two of interest in the process. If you imagine a program at scale with 50 million accounts averaging $5,000 in balances, the cost to taxpayers would be $2.5 billion per year for every point of interest rate premium."

I'm not so much concerned about the costs so much as: one, the suggestion that the administration has no idea why people don't save money on their own (and still thinks that home-ownership for everybody is the way to go); and two, anything the government provides as a voluntary service has the potential to be made mandatory. It's easy to imagine this new government program put into place, and then in order to increase the "success" of the program, pushing for more and more sign-ups. It is very easy to imagine a future where anybody who doesn't have an government-recognized IRA or 401(k) plan being forced to participate in this program.

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  1. MyRA. It’s a new savings bond that encourages folks to build a nest egg.


    1. Not just a scam, scamola!

  2. MyRA guarantees a decent return with no risk of losing what you put in.

    “Also, for a limited time only we will be selling shares of this lovely stone bridge connecting the island of Manhattan with Brooklyn. SEND YOUR MONEY NOW!”

  3. It is very easy to imagine a future where anybody who doesn’t have an government-recognized IRA or 401(k) plan being forced to participate in this program.

    This is the latest incarnation of “Guarenteed Retirement Accounts”. A sneaky plan by progressives to backstop unfunded pension liabilities by forcing everyone to invest their 401(k) in government savings bonds.

    Not only is it imaginable that this could be made mandatory for people without 401(k)s, it’s already been pimped for making it mandatory for people WITH 401(k)s.

  4. I give my money to the government now, and forty years from now they agree to pay it back. What could go wrong?

    1. Well, Tim, we saw this great opportunity to get in on the ground floor with an outfit called “Solyndra”.
      It was really going great, until…

    1. Thanks for the link.

    2. I’ve let my bank know that I wont put any money with them in a 401K because of progressive threats to shake them down causes me to highly doubt their long term stability.

      I don’t know if you are old enough to have taken advantage of interests rates in the late 80s when you could get a nice turn around on CDs. I was able to pay my way through college with work and an investment strategy that saw high returns within a few years.

      1. In other words, at that time, as a young neophyte not drawing on a lot of built up knowledge of finance, just dipping one’s toe in the market could prove to be highly profitable.

  5. A picture of the old city of Myra, and the alt-text doesn’t mention St. Nicholas? The guy who helped a young woman with her financial planning by giving her a bag of gold?…..int_id=371

    1. Now, I’m not vouching for that story, but to be such a popular bishop he must have done some good things for the poor.

    2. I heard St. Nicholas was white.

  6. That ‘MyRA’ shit is real? I thought that was a parody. What does it say that apparently democrats are trying to transition off Social Security?

    1. Transition off? Down the road, they’ll just propose combing your Myra and SS account into one SS account for simplicity. And use the Myra funds to pay for your SS benefits.

  7. And soon enough, Congress will propose a special tax on private IRA’s and 401k’s to help bolster MyRA’s. Of course that won’t be enough, and eventually they’ll just confiscate all private retirement accounts. Book it.

    1. Except they won’t call it a tax. It will take the form of reduced social security benefits and higher Medicare premiums for beneficiaries of private IRA and 401k accounts. That, and perhaps nationalization of such accounts under MyRA and even revocation of their heritability (after all they are retirement accounts and after you’re dead, you don’t need the money.)

    2. No, they’ll just forcibly transfer some of your productive assets in your IRA into a MyRA bond. For your own good.

  8. Great, so now my retirement is going to be seized by the government, too.

    1. Think of it as our retirement, you had more than you needed. Alcoholic homeless people on skid row can’t be expected to contribute to their own future. That’s why a little, tiny piece of your pie will get sliced out. 30% max.

      1. That retirement account? You didn’t build that.

  9. MyRA would be a program of small Roth IRAs with access to a special, safe investment that pays a little better than Treasury bills.

    In other words, MyRA is a program through which the government can borrow from investors at above-market rates. Genius!

    1. You mean borrow from low-income suckers who are too risk averse to pursue a better return in a mutual fund.

      When the government proposes a “special safe investment” I am immediately reminded of Social Security and it’s “special” non-transferrable treasury bonds.

  10. MyRA would be a program of small Roth IRAs with access to a special, safe investment that pays a little better than Treasury bills.

    Sounds like a terrible investment for someone just getting started on their nest egg. That’s the time to take risk.

    If this was a proposal to replace SS (hah!) that would be an improvement though.

  11. The fact that someone has dreamed up a way for the government to “help” people to save is conclusive evidence that without government, no one would save. Why do you want retirees to starve to death?

    Oh, and since no one has slipped in a Myra Breckinridge reference, I will: This stuff makes the aforementioned novel look realistic.

  12. Slightly off topic:

    EXCLUSIVE: Obama’s high school pot dealer who he thanked for the ‘good times’ was beaten to death with a hammer by his gay lover after fights over flatulence and drugs

    Raymond Boyer was known as ‘Gay Ray’ to Obama and his marijuana smoking ‘Choom Gang’ of privately-educated kids at Hawaiian high school
    Ray was bludgeoned to death with a hammer in 1986, seven years after he supplied the future president and his friends with drugs
    Lover Andrew Devere, a male prostitute, gave police a variety of reasons for the murder
    He said surfer Boyer put him down constantly and broke wind in his face
    Court documents uncovered for the first time by MailOnline
    Choom is island slang for pot smoking and group went on excursions to countryside to get high and party, sometimes in Ray’s surf van
    Devere is now living on the mainland after serving his life sentence
    Obama last week said marijuana was no more dangerous than alcohol
    Devere’s new wife Elizabeth told MailOnline doing drugs is fine if you are rich and ‘have the tools to deal with it’ but not if you are poor with problems…..drugs.html

    1. “Devere is now living on the mainland after serving his life sentence”

      He finished serving his *life* sentence? And he’s still “living”?

      Sounds like an Irish bull to me.

      (apologies to Irish and his countrymen)

      1. Don’t they have editors at the Daily Mail?

  13. “MyRA guarantees a decent return with no risk of losing what you put in.”

    Not until the government can’t pay its debts and they seize the money in the account.


    2. Exactly This.

      Anyone who tries to sell you an investment and claims there is “no risk” is taking you for a sucker.

      OF COURSE there is risk, just like there is risk in defined benefit pension plans, and in Social Security. There is no ironclad guarentee that the person who is supposed to pay you is going to have the money in 20-40 years.

      MyRA, and ANY OTHER government-backed savings fund is effectively a sneaky way for the government to borrow money from you. There is absolutely no guarentee that in 20 years, there won’t be a financial crisis or a currency devaluation, and the government will renege on it’s promise.

      There are absolutely no guarentees in life whatsoever, but you are much better off having the ability to move your money offshore, or into alternative investments AT WILL, then to put it into an account that someone else controls.

      1. No, there is no risk. If the government needs more money to pay you back, they’ll steal more in taxes. From you.

        1. No, if they need your votes, they’ll steal it from someone whose votes they don’t need.

  14. How about just letting me keep more of MyMoney?

    1. To him, there is no such thing as your money.

  15. So his plan for retirement security is get people to save no more than $15k, on which the Government will pay below-inflation level interest? That will definitely cover retirement.

    1. I have 15K in my 457 account now. I don’t regard that as even half a year’s worth of retirement assuming it at least keeps up with inflation. (Past returns have been mixed)

  16. The whole plan is beyond stupid, primarily because if I wanted to “safely” invest my 401K/IRA/Roth/etc. in Treasury Bonds then I would FUCKING invest them in Treasury Bonds. Yes, there are some 401K plans that are a bit more restrictive, but the MOST restrictive thing is not being able to make tax deductible IRA contributions when you have access to a 401K. That rule alone is phenomenally stupid.

    1. At least you can backdoor roth, for now.

  17. What is all of this shit about the middle class not having access to the stock market? A lot of the middle class doesn’t save enough or bother to invest, but investment in stocks and other things is far more accessible to people of moderate income than it ever has been.
    I find the whole “middle class needs help” thing quite disturbing. The whole good thing about being middle class is that you don’t need help. You can live comfortably and take care of your own shit. I’m not going to say for sure that it is the intended result, but these assholes really seem to want to make the middle class welfare dependent just as the poor have been.

    1. I’m not going to say for sure that it is the intended result

      I will: that is the intended result.

    2. Access means someone else paying for it.

    3. Seriously. It’s called Ameritrade. I started with $2,000.

    4. There’s a fucking Edward Jones on every fucking block around here.

      If you’re not investing, it’s because you don’t have the money, or you don’t want to. Or both.

      All you need to to is watch TV for a few minutes to get a few options.

      1. On top of that, I am constantly getting cold-called by Merrill Lynch.

  18. “work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle-class Americans”

    Now does THAT make sense? I’m pretty sure that a large number of people who hold 401(k) accounts are in the middle class and the tax code most definitely favors a 401(k).

    1. Umm, “How does THAT make sense?”

  19. The official reason for any government program is never the real reason for it’s creation. Any program to encourage people to save is almost certainly a favor to some commercial interest dressed up to look like a favor to the little people. If you want to know the real beneficiary, just look at what organizations lobbied for the program.

  20. Let me guess, administered by Goldman Sachs?

  21. It is very easy to imagine a future where anybody who doesn’t have an government-recognized IRA or 401(k) plan being forced to participate in this program.

    Your imagination is not working at full potential. Setting my imagination at 11:

    MyRA will be rolled out as a benign savings program. Then large IRA and 401(k) accounts will be mandated to convert to MyRA. The President has a pen and a phone; if Congress won’t act to protect the retirement savings of ordinary Americans, he could do it with an executive order just like his recent edicts regarding the IRS Code or when FDR nationalized gold. However, it’s more likely that he’d use the phone to get the Dodd-Frank Bureau of Financial Consumer Protection to issue an edict. But, don’t worry, if you like your 401(k), you can keep your 401(k). Period. (It need only comply with certain stupid and unattainable features of MyRA.)

    Lenin did something like this toward the end of the NEP. New School of Social Research Professor Teresa Ghilarducci pitched a similar plan in Congressional testimony a few years ago with the approval of Democrat members. So this far worse outcome of MyRA really didn’t strain the imagination much.

    1. See above. They called it Guarenteed Retirement Accounts. MyRA is a re-branding of the same idea.

      The plan is to forcibly convert 401(k) plans into government controlled accounts so they can spend the money on more free shit.

    2. This is the classic Obama strategy. During the 90s he made speeches at progressive gatherings to advance a strategy in answer to the more centrist Clinton strategy of triangulation by giving singularization a leftist twist. In essence, join big business crony capitalist and an underclass cause together to squeeze the middle. You saw it in the promotion of the CRA, for one.

      1. by giving singularization

        Would you believe spellcheck didn’t like my version of ‘it’? Don’t know what I wrote but it must have been a massive fubar.

  22. Let me guess, administered by Goldman Sachs?

    Chris Dodd and Angelo Mozilo.

  23. It is financial malpractice of the worst kind to tell anyone to put their entire retirement savings in low-yielding Treasuries.

    This is a tax on the poor and stupid.…..-poor.html

  24. If more people invested in the stock market, then there would be more caution (one hopes)in them supporting legislation destructive to the market. Many seem to think investing is some sort of a closed club.
    I don’t know how many have said things to me like “Big Oil is raking in obscene profits.” yet don’t realize they can buy stock in these supposedly “obscene profiting” companies by contacting a broker.
    Get them invested and they will soon see the reality of low profit margins and how “feel good” attacks on the free market quickly send the economy spinning into trouble.

  25. By the way, this (decent return, no risk) sounds suspiciously like a permanent life insurance plan of some sort. And what I mean by that is that you would never use it to save for retirement.

    At least with the insurance, your family could get a benefit. I’m not counting on that with the government:

    “Oh, you’re dead? Well, you won’t be needing this. And neither will your family since they each have their own government mandated MyRA. We’ll use it better than you would have anyway.”

  26. This has to be some kind of scheme to sell more government debt into an increasingly hostile market.

  27. The next move will be requiring IRAs and 401ks to buy a minimum level of Treasuries to keep their tax bennies. Slow-mo seizure of those accounts as the minimum escalates, all sold as ensuring the safety of those accounts.

  28. And it is funny that they ask why people do not save when the government and Fed seem to discourage a lot of it. I think if I have $10,000 in a savings account, I can get 0.5% interest. With the Fed using a target of about 2% inflation, with a 1% minimum, that means I have a negative real return. And that does not even include the fact that the government will tax the $50 in interest that I might make to boot. There is constant talk about how do we get people to spend their money to fuel the economy and this supposedly factors into the Feds plans with interest rates as well. Crazy.

    1. Today’s vulgar Keynesians really are incoherent. They simultaneously complain that people can’t or won’t save enough for retirement and that people aren’t spending enough to stimulate the economy. Then they propose government programs to incentivize saving a little bit while lowering interest rates, which does just the opposite in a very big way. Meanwhile, they impose a vast, arbitrary, and unpredictable regulatory regime that increases political risk and disincentivizes investment in anything that does not involve capture of economic rents. To top things off, the vulgar Keynesians arrogantly consider themselves to be an anointed class of superior intellects.

    2. If they really wanted to encourage savings, they would eliminate the federal income tax.

  29. Be afraid. Be very afraid.

    When the feds can’t peddle their junk bonds on the open market anymore (which they already can’t at the rates they want without the Fed buying most of them), they will force all of us to buy them.

    Voluntary. Sure.

  30. Yeah, been there, thought of MyRA before… like about 8-9 years ago.
    Hey, O, you been reading my blogs, or what?…..splans.htm

  31. MyRA implicitly acknowledges that Social Security is both insufficient and a bad idea. Otherwise the suggestion would be to divert this extra money into OASDI contributions. But it pays back pitiful returns that are usually negative. Even defenders of Social Security don’t talk about expanding it, which is tacit acknowledgment that it’s a bad investment.

  32. Another problem with MyRA is that she guides your retirement steps ONLY until your account accrues the princely sum of $15K and then she assumes you are now competent to handle your retirement finances outside the MyRA program.

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