Thanks to bls for pointing this out:
..about using gambling to encourage saving (and then banning it)?
http://johnpapola.com/2010/11/gambling-to-encourage-savings/
It seems clear to me that lotteries were put in place by our government as a way to levy a substantial regressive tax on poor people. The advertising is _clearly_ targeting poor people and heavily promoting their infinitesimal chance of winning as their ticket out of the gutter. When the mob ran numbers (which is _exactly_ what the lotto is) they generally returned 90% or better of the money to the ‘players’ (gamblers), yet when our government takes over now players are lucky to get 30% back (often at least 30% is (supposedly targeted, but generally winds up in the general fund) siphoned off for things taxes are supposed to pay for, then winners get to pay federal, state and local taxes on the money that people have already paid taxes on prior to betting, all at the highest rate, of course). That is why, of course, that the government prohibits any competition, they know that if they allowed the competition they would be driven right out of business.
There are so many evils committed by our government (I use the collective term here, even though the lotteries are done by states, because the federal government, if it gave a damn, could trivially shut these things down). While this is a minor one in comparison, I decided to air it a bit on my blog just to show the pervasiveness of the issue.
Now, to the specifics of the article… I agree with the idea that it is best to leverage known, established behaviors when attempting to alter people’s behavior and while the interest returned on the sorts of things described are quite below what is achievable by making rational investment decisions, (unlike the lottery) it does return a positive rate and any savings (heck, even if the money actually shrinks due to inflation, having the savings as a cushion for bad times might keep more people from joining the growing ranks of the destitute) is good savings. I like the idea of using the same concept to encourage the bullet-proof youth market to get health insurance as well. The intelligent people (seemingly fewer every day, though I am sure that is an illusion; people have always been morons) will invest directly, or purchase insurance at lower prices, etc., but if we can widen the safety net for stupid bullet proof people (yes, I know I used to be one of them, why do people keep thinking that changes my attitude today?), then it is all good.
