The Corner

What the Heck Is MyRA?

Barack Obama apparently proposes to reinvent the savings bond. Does anybody know why savings bonds went out of fashion? Because they are a terrible way to save money.

The president promised that his MyRA (once he figured out how to say it) would combine a non-trivial rate of return with zero risk. Given that real interest rates on zero-risk propositions are generally right around zero of late, the only plausible way to get that done is with a subsidy. This sounds like a terrible idea.

Unless you have about $500 million or so, zero-risk investments are generally a bad idea, because returns are proportional to risk. (If there’s no risk, what are they paying you for, other than time?) Almost everybody, and certainly young people entering the work force (if they should be so lucky!), is better off with some significant amount of risk in his retirement portfolio, a well-diversified, long-term savings program being the most reliable path to a comfortable retirement. A zero-risk/decent-return instrument is a perpetual-motion machine.

Most Popular

Culture

Courage: The Greatest of Virtues

EDITOR’S NOTE: The following is Jonah Goldberg’s weekly “news”letter, the G-File. Subscribe here to get the G-File delivered to your inbox on Fridays. Dear Reader (Or Listener), As the reporter assigned the job of writing the article about all of Sidney Blumenthal’s friends and supporters told his ... Read More
Immigration

My American Dream

This morning, at 8 a.m., I did something I’ve wanted to do for as long as I can remember: I became an American. I first applied for a visa in early 2011, and since then I have slowly worked my way through the system — first as a visa-holder, then as a permanent resident (green card), and, finally, as a ... Read More
U.S.

The Gun-Control Debate Could Break America

Last night, the nation witnessed what looked a lot like an extended version of the famous “two minutes hate” from George Orwell’s novel 1984. During a CNN town hall on gun control, a furious crowd of Americans jeered at two conservatives, Marco Rubio and Dana Loesch, who stood in defense of the Second ... Read More