Greased by lobbying and campaign cash, tax breaks for retirement savings are one thing Congress agrees on. But they also blow out the deficit and add to income inequality.

Five months before Congress faced a near-catastrophic standoff over the debt ceiling, with Republicans demanding restrictions to food and Medicaid programs to rein in spending, a bill that raised the cost of private retirement savings accounts to $282 billion per year was quietly signed into law.

In this era of deeply divided politics, the 2022 bill known as Secure 2.0 was hailed as a bipartisan success — a victory for average Americans. It had sailed through the House by a whopping 414-5 vote. It followed four other major bills passed between 1996 and 2019 that dramatically expanded taxpayer savings – all equally lauded as bipartisan victories.

But that rare issue that brought a divided Washington together also increased wealth disparities and the federal deficit. And the victory was most strongly applauded by the burgeoning financial services industry, for whom tax-advantaged retirement savings has transformed a $7 trillion retirement market in 1995 to a $38.4 trillion behemoth in 2023.

  • Flying Squid
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    27 months ago

    Me:

    People think that if you spend $30 or $40 a month on things that make you and those you love happy, you’ll never save enough to make yourself marginally more comfortable in the last 10-20 years of your life (if you’re lucky) that will be uncomfortable no matter what.

    You:

    I promise you, if you put that $30/month into your own IRA, you’ll make her a lot happier when she doesn’t have to support you when she’s grown up.

    Me:

    “I know you want that doll, honey, but I’ve put the money for it into an IRA and it will make you a lot happier when you don’t have to support me when you’re grown up.” You do you with your kids, I’m going to get mine things that will make her happy.

    You:

    And yes, that’s exactly what you say. Funny how it’s not things that make kids happy, it’s spending time with them. Reading to my daughter her favorite book for the 1000th time is much more enjoyable than just buying her a new doll.

    So yeah, you did say either buy a child a toy or invest in retirement.

      • Flying Squid
        link
        17 months ago

        Okay, well, you can do the whole “what are you going to believe, me or your own eyes?” thing, but I still quoted what you said.

          • Flying Squid
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            07 months ago

            Really? This is what you’re going with? That I didn’t actually copy and paste directly from what you said when anyone can just scroll up and see that I did?

            • @ripcord
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              27 months ago

              Dude, there are more than just you and me here :)

              I didn’t say any of those things. That was someone else.

              However, in that case, the starting premise appears to have been you saying that there is only $30-40…no, nevermind. This is why I replied with short replies before. I really don’t care enough about arguing on the Internet about this. Whatever it was, you’re right. I said those things and everyone thinks whatever it was.