US Adopting Kiwi Saver to Improve Savings Rate

[Frodo]

Part of what led to the Great Recession was Americans over-consuming and maxing out on their credit.

To correct that we will have to improve our savings rate, among other things.  What does everyone think of the US eventually adopting some variant of New Zealand's Kiwi Saver?  Can it be done?

[DC Al Fine]

I think it would be an excellent idea. One small issue I have with Kiwi Saver is that only certain investment schemes are "approved", which could become a big issue once lobbyists get involved. All in all though an excellent plan. However, I don't think there is the political will to implement it in the USA if it involves touching Social Security.

[opebo]

Part of what led to the Great Recession was Americans over-consuming and maxing out on their credit

Utter nonsense.

There savings rate isn't 'too high' or 'too low' - it is just in the wrong hands.  Inequality means there are vast useless savings in the hands of the rich, and incomes inadequate for survival, much less proper consumption in the hands of the masses.

[Frodo]

I think it would be an excellent idea. One small issue I have with Kiwi Saver is that only certain investment schemes are "approved", which could become a big issue once lobbyists get involved. All in all though an excellent plan.

We should be fairly familiar with this already.  Don't we only allow certain private plans to pass government scrutiny before offering them in Medicare Parts C & D?  

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You think this is akin to partially privatizing Social Security -or at least it could be perceived that way?  

[LastVoter]

No, we need to adopt a nationally fully funded retirement system, expecting working class to save when they can barely afford acquire enough credit for their day to day expenses is travesty.

[Benj]

So... mandatory 401k matching? I don't see what else makes this substantively different from the US system of 401ks and IRAs. Significant streamlining of retirement options under ERISA would be a great idea (and probably improve savings rates because people wouldn't be scared by how confusing a mess the current law is), but it seems like a matter of form.

[bedstuy]

The US savings rate is far above where it was during the housing bubble.  People have adjusted their behavior on their own to an extent.  Maybe, that augers against government coercion on savings. 

I'm also wary of comparing the US savings rate to other countries.  How much you actually need to save is dependent on your insurance system, government programs, access to capital markets and such.  Saving too much is also a potential problem.  I'm not sure government really knows where the proper savings level ought to be, especially in varying levels of growth and decline. 

Also, walling off people's money can put them in a bind if they get in sudden trouble.  Do they need to prove to the government that they actually need the money?  That administrative process could be expensive by itself.

I would prefer the following even more socialist alternative: free government checking accounts.  The government should just have a free online checking account/ debit card with no monthly fees.  Combine it with an ability to easily pay taxes online for free and you would create a bunch of systemic efficiencies.  Currently, a ton of poor people get nickle and dimed by consumer finance and have to use money orders instead of checking accounts.  This would solve that, improve the saving rate and give the government a bunch of capital.

[Simfan34]

We definitely need more saving and I think this might be a good way to do it. I've always considered some form of mandatory saving, or perhaps converting social security to a mandatory savings programme.

[Platypus]

Isn't that just a lower version of super?