Tuesday, April 05, 2005

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"Libertarian Self" Loses Internal Debate Over IRA in Bankruptcy This article describes a ruling that says IRAs are not subject to bankruptcy proceedings. I'm all for that. This is where my internal libertarian it at war with my pragmatic self. My pragmatic self clearly wins. My inner libertarian says: "If people want to leverage their IRAs as collateral (implicitly or explicitly), they should be free to do so." However, my pragamitc self strongly believes that, in general, it is in society's interest for retirees to have sufficient funds to house and feed themselves; not to mention, pay for medical care. So, I don't think it would be for the greater good if creditors can access money that has been more or less earmarked for retirement. My pragmatic self if futher bolstered by its belief that Americans take on way too much debt as it is, and the last thing they need is to find more credit access by leveraging their retirement savings. My inner libertarian, while reconciled to defeat, responds with this parting observation: "You are making some strong, implicit assumptions about retirement. Suppose someone turns 65, and--for whatever reason--they don't have enough savings to retire. So they keep working. That is almost certainly for the greater economic good--more net productive hours in the economy." Pragmatic self concedes the validity of this point, but considers it inadequate grounds for altering his position. 7:22:28 PM    comment []