[extropy-chat] Lottery tickets as personal savings plan

[BillK]

On 5/19/06, "Hal Finney" wrote:
<snip>
> The problem this proposal aims to fix is two-fold: poor people tend not
> to save enough of their income, which both keeps them poor and makes
> them especially vulnerable in old age; and poor people waste money on
> the lottery.  By turning lottery income into personal savings plans we
> exploit people's human weakness for gambling and turn it into a long-term
> benefit in the form of forced savings.
>
> Politically this would be difficult because of the charade that lottery
> money is being used for schools.  In fact, all government income is
> essentially put into a big barrel and used as the government likes.
> The whole school thing was just a scam to sell the lottery to voters.
>
> The bigger issue is that diverting lottery profits to be income for
> poor people would reduce government revenues.  In the long run it should
> be OK because government liabilities would be much lower in the future
> as poor people are able to fund their own retirements, but governments
> tend not to think in the long term.  Taking a hit today in return for
> long-run benefits is the opposite of how governments usually work.
>

In the UK, the government savings department sells Premium Bonds to the public.
<http://www.nsandi.com/products/pb/index.jsp>

Max holding is 30,000 pounds (56,000 USD). Your bonds go into a
monthly lottery. There are two £1 million jackpots plus over a million
other tax-free prizes every month. Your original purchase money can be
cashed in and returned at any time. A maximum holder will usually win
enough small prizes to have a regular interest payment every month.

The government makes a profit by only paying out 3% interest (tax
free) in prizes.

BillK