Have you ever seen those extremely obnoxious J.G. Wentworth commercials where someone yells at the camera that its their money and they want it now? If not, you probably are lucky and never see daytime television. J.G Wentworth is a leach, a vampire on society. He lures people who are in desperate conditions, normally, into selling their annuities for pennies on the dollar. Companies like this are scum but from them, I have an idea that could boost the economy in a big way.
First, let me apologize if this has already been proposed, but I don't remember seeing it.
I have a 403(b) account, actually two from the same employer. A 403(b) is the non-profit version of a 401(k). The terms of my contracts keep me from accessing that money until I turn 59 years old. For me, that is a little over 9 years from now.
My 403(b)'s are not huge. Let's just say that combined, they are less than $20k. Even if the market goes on a huge binder for the next 9 years, there is no way these accounts are going to "take care of me in my retirement". As Elizabeth Warren pointed out, most people in retirement currently rely, or will, on Social Security for their means of existence in retirement.
So if we say that my accounts say go up to $30,000 by the time I hit 59, and I take $1,000 out per month, I obviously will have exhausted my accounts in a little over 30 months. After that, it is all Social Security. BTW, this scenario is predicated on the unlikely assumption that there will not be some kind of a major crash of the market between now and then.
However, if I had access to that money now, I would do like most people in my situation would do. I would make the logical choice of withdrawing that money all at once, and spending it on things that I need. So I, and most people would be pumping billions of dollars into the economy, instant stimulus. And unlike the stimulus package of 2009, this would all go back into the economy because unlike 2009 it would all be real money and without a bunch of tax breaks with no immediate effect.
It would take Congress passing a law that would make these kind of restrictions inoperable.
The actual structure of such a law could take many forms. Personally, I would like to see something to the affect that everyone could take a one-time draw on their account up to "x" amount, again say $20,000. However, the money would have to be spent within a certain time and not just invested in some other type of investment. An alternative to everyone being able to do this could be to allow it for anyone who has become unemployed or who has lost work due to a disability. The latter is clearly not my favorite.
There would have to be some protections for people. One would be how this money would be taxed. There are smarter people than I that could come up with the answer, but I would like to see no tax on the withdraw for people with an AGI of an amount that helped the middle income brackets without giving free money to millionaires and billionaires.
Another protection would have to be for people going through bankruptcy. Currently, most 401k's and 403b's are protected from creditors when a person goes through bankruptcy. This protection would have to stay in place. Yes, it would possibly allow a person to go through bankruptcy and then get their money from their 401k or 403b, but I am okay with this
I am not an expert on these kind of accounts so I am sure I am missing things. Please flesh them out in the comments.
There would clearly be those who would be against such a plan. Mostly, it would be the Wall Street Banksters who would be loosing future fees that they currently have locked up. Then there would be the Congress critters who do the beckoning of Wall Street. Sadly there are a number of Dems as well as Repugnants that would probably throw up road blocks.
There will be those who argue that people shouldn't be allowed to do this. They will argue that to be allowed to make such a withdraw would only hurt the people such a law is intended to help. This is complete bullshit. You will here this argument mostly from those who normally rail against the "nanny state" and go on and on about how government should let people make their own choices. They will claim we are only hurting ourselves in the long-run. They will claim we are not knowledgeable about such matters. They will come up with lots of spurious arguments, but what they will be doing is protecting their big money handlers.
But just because there would be clear opposition, doesn't mean it shouldn't be tried. Besides, its my money and I want it now.
P.S. I have things to do so will not be able to reply to comments right away, but look forward to seeing them when I can.