The Obama Plan

There's a proposal kicking around Congress that's been called the Obama IRA: Companies with 10 or more emplyees but no retirement plan would be required to enroll their employees in an IRA that would automatically deduct money from employees' paychecks. The beginning default deduction would be 3 percent, although employees would be able to change that rate or opt out altogether.

There are good things and bad to be said about this scheme - it's great to get more people planning for their retirements, although it might prove burdensome to administer for a lot of small businesses - but there's one way in which it could prove very helpful. As you know, many businesses have cut back on their 401(k) contributions, or eliminated them altogether. At a point when our markets have been struggling, the last thing we need is to cut back on this crucial source of dollars for them.

It's not really been sorted out how these Obama IRAs would work, although the idea is they'd be mostly directed toward safe investments like money-market accounts. But there's also talk of putting this money into target-date funds, which are mutual funds whose assets automatically rebalance as you near the target date for which you plan to start withdrawing money, generally your retirement.

Having fresh funds flow automatically into mutual funds - and into the American stock markets - would be a real positive for the economy. Whether it's via this Obama plan or some other, we need to get to the point where people are regularly buying stocks again.