Washington, DC - To support long-term financial security, the United States should open savings accounts for every child, New America Senior Research Fellow Phil Longman told MSNBC yesterday afternoon.
"American Stakeholder Accounts" would improve prospects for college attendance, homeownership and a secure retirement, which were damaged by the Great Recession, Longman explained on MSNBC's "The Cycle."
"We need to take steps to get more Americans saving and relying less on expensive credit," Longman said. "Saving automatically, from birth, will give our next generation a real shot at the kind of American Dream their grandparents enjoyed."
He suggests the accounts be paid for through reforms in the tax code, adding that the recent Supreme Court ruling on health care affirms the plan's constitutionality.
Longman made the case for these accounts in the current issue of the Washington Monthly. Under his proposal, the accounts would:
* Be endowed at birth with $500; accounts for children of low-income parents would be eligible for additional funds of up to $500.
* Be eligible for up to $500 a year in matching funds for contributions from low- and moderate-income families.
* Automatically save 4 percent of every worker's paycheck into their own account.
* Be available to pay for post-secondary education and training at age 18 and purchase of a home at age 25.
* Convert into an annuity at age 67 to support retirement alongside Social Security.
An embeddable clip from "The Cycle" can be viewed here. The Washington Monthly article is available here.
"The Cycle" (3pm - 4pm EST) is interviewing authors of the Washington Monthly issue each day this week in a series focused on "The Future of Success":
* Wednesday: Kevin Carey on college credit for "The Assets Between Your Ears"
* Thursday: John Gravois on the CFPB, "Too Important to Fail"
* Friday: Reid Cramer on pro-savings policy solutions, "The Assets Agenda"
To interview Phil Longman or any of the other writers, please contact Clara Hogan.