- - Tuesday, February 4, 2014

ANALYSIS/OPINION:

With U.S. international relations going through perhaps the worst period in 40 years, the disastrous rollout of Obamacare, an economy still in the doldrums and the lowest rate of employment in more than 40 years, President Obama carved out time in his State of the Union speech to introduce his new savings plan, “myRA” (“Obama’s retirement MyRA plan is a gimmick,” Comment & Analysis, Feb. 3).

Mr. Obama was obviously in dire need of material for the speech to have come up with this.

Consider that the maximum total a myRA account can accumulate is $15,000. The money put in would be taxed first. The investment vehicle is a government security yielding about 2 percent.

The only benefit would be the tax-free accumulation of the interest. Inflation is growing at more than 2 percent, so the overall return would be negative.

It sounds more like another way for the government to borrow, rather than giving the people a significant new savings vehicle. Does this sound like a good deal to anyone?

In addition, what about the details? How the money would be put in and taken out are still to be determined, but apparently employers must sign up for the plan and agree to a payroll-deduction program.

What reporting requirements would be the responsibility of employers? What new administrative costs would be incurred by employers and the government?

With no penalties on withdrawing the money, would people be disciplined enough to leave the money in the account when faced with financial pressure?

If someone did want to withdraw money, how long would it take and what would be the process required to get it? Would participants have to go to their employer to make a withdrawal?

An alternative would be to open a savings, money market or brokerage account. The interest rate may be slightly lower, but investment options would be greatly expanded, making potential returns much more attractive.

The government would not be involved, the employer would not be involved and there would be no limitations on how much you can put in or restrictions on when or how much you can take out. MyRA accounts appear to be a diversion away from the mess that is the state of this union.

The most important issue today is the creation of new jobs. Mr. Obama should focus on stimulating the economy with tried-and-true methods that encourage business expansion. Instead of creating new restrictive regulations, he should eliminate or suspend regulations that kill profitability and, as a result, jobs.

Since creating jobs is the first thing Mr. Obama thinks about when he gets up in the morning (or so he said), I suggest he use his pen and phone to suspend one job-killing regulation each day.

CHRISTOPHER S. MOODY

Gaithersburg

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