Greased by lobbying and campaign cash, tax breaks for retirement savings are one thing Congress agrees on. But they also blow out the deficit and add to income inequality.

Five months before Congress faced a near-catastrophic standoff over the debt ceiling, with Republicans demanding restrictions to food and Medicaid programs to rein in spending, a bill that raised the cost of private retirement savings accounts to $282 billion per year was quietly signed into law.

In this era of deeply divided politics, the 2022 bill known as Secure 2.0 was hailed as a bipartisan success — a victory for average Americans. It had sailed through the House by a whopping 414-5 vote. It followed four other major bills passed between 1996 and 2019 that dramatically expanded taxpayer savings – all equally lauded as bipartisan victories.

But that rare issue that brought a divided Washington together also increased wealth disparities and the federal deficit. And the victory was most strongly applauded by the burgeoning financial services industry, for whom tax-advantaged retirement savings has transformed a $7 trillion retirement market in 1995 to a $38.4 trillion behemoth in 2023.

  • ampersandrew@lemmy.world
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    7 months ago

    So I suppose maybe if I denied myself and my child every pleasure in life, sure, I could put money in a 401(k).

    But that’s unproductive hyperbole. Not every pleasure in life costs money, and lots of things you spend money on can be optimized. And even after doing that, if you still feel too squeezed, it might be worth considering a career change and a plan for how to get there.

    • Flying Squid@lemmy.world
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      7 months ago

      It might be unproductive hyperbole, but I’ve been told that exact same thing more than once right here on Lemmy.

      • QuarterSwede@lemmy.world
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        7 months ago

        Sounds like you have an axe to grind. Sorry life has been hard for you friend. Hope it gets better. Hang in there.