Streams

Freakonomics: Lottery for Savings

Friday, April 06, 2012

Stephen J. Dubner, host of Freakonomics Radio, talks about the latest edition of Freakonomics Radio and whether America's enthusiasm for lotteries can translate into a higher savings rate. 

Guests:

Stephen J. Dubner
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Comments [23]

Russell from UWS

The best lottery pay-off I know of is in New Mexico. The New Mexico lottery awards full scholarships to all in-state students - with a 2.5 or higher gpa - that graduate from certified/recognized NM high schools and enroll in a state colleges or universities. The scholarship covers 100% of tuition for 8 consecutive semesters. NM started its lottery in 1996 and has helped educate over 75,000 students since.

Apr. 06 2012 12:08 PM

Here's an idea that's timely with tax day around the corner:

Link taxes and the lotto. The government could use 1% of it's budget to give out lotto winnings to tax payers.

Current budget is $3.6 trillion, so 1% would be $36 billion. Too much for one ticket, so lets spread it around - let's say 360,000 winners of $100,000 each [or 36,000 winners of $1 million each] - we can vote, I'm democratic!

Winners would of course have to pay taxes, so it would be even cheaper to do. And winners would also get audited, so tax cheats can't collect!

I bet people would feel a little better about tax day with a system like this!

Apr. 06 2012 12:00 PM
Tom from UWS

@ Jennifer - did you get the sense that Dubner was pro-lottery? I did not.

Apr. 06 2012 11:57 AM

re fred:

Always used to feel the same way, that it's annoying to see people using food stamps to get food and then putting their own cash into the lottery. But knowing the odds, they're really just giving it back to the government in "the poor man's tax". In this sense the government is getting 50 cents back on the dollar, and in fact another 18 cents or so in federal and state taxes on the prize!

Apr. 06 2012 11:50 AM
Jennifer

"their" -- Should proofread!

Apr. 06 2012 11:49 AM
Jennifer

Every time there's another "Mega Million" mania, I take the opportunity to tell my children that when I was there age, there were no state lotteries at all!

The lottery is a regressive tax that preys on the poor. But worse than that, it's a distraction from doing real things to improve one's life and one's community. What if people put those few dollars or that enthusiasm toward community improving, like planting some tulips or picking up garbage. As the caller work in the bodega says, it's sad.

I'm not religious, but I would certainly call this type of dream-selling a sin!

Finally, this Freakonomics guy knows better and yet he uses his privileged position and his education to promote something that is really bad for us as a society. There are much better ways to get a real thrill!

Apr. 06 2012 11:48 AM
Mike from Queens

Last time I bought into a large lottery pool, I couldn't stop thinking about what I would do if I won. The net effect was that I was less satisfied with what I already have than I was before I played.

Apr. 06 2012 11:46 AM
John from NYC

Why not allocate lottery proceeds towards healthcare expenses for the States?

Apr. 06 2012 11:46 AM
Jl

As brilliant an idea as the no lose lottery is, is there a way i can secure my future by estimating How big are squirrel's teeth? Great show, we are really taking our best shot at solving America's problems

Apr. 06 2012 11:44 AM
LL from UWS

Lotteries in Great Britain, by way of contrast:

Arts funding through national lottery--doing great things!

Post Office Savings Accounts had a lottery when I lived there. I won $60. I wish our postal system had similar.

Apr. 06 2012 11:44 AM
Bill from Central NJ

Lotteries are proof that Steinbeck was right, Americans believe that we're all temporarily disadvantaged millionaires. The lottery is one way for us to overcome our temporary disadvantage.

Apr. 06 2012 11:44 AM
Carl from New Jersey

Put the investment and gambling together -- AND make a commernt on the way that the "wall street experts" are really handling our funds. I want to see IRA's and 401K plans create Lottery funds -- like the different options that they offer for bonds, or US stocks, etc..
This portion of your dollars would be invested in lottery tickets and would pay back those in that fund. At least this way you know it is a gamble -- and 'insider information' cannot tilt the answer to the 1%.

Apr. 06 2012 11:42 AM
Erica from Manhattan

When the jackpot gets huge, I'll buy one ticket. I figure this increases my chances of winning infinitely (from 0 to 1 in a gazillion). But I don't buy more than one, because it would take a huge investment to increase my chances significantly. I don't expect to win, but "you never know...."

Apr. 06 2012 11:41 AM
LL from UWS

Will guest comment on the morality of how lotteries are marketed?

(I buy an occasional lottery ticket just for the fun of how it stimulates my imagination and tests my character--what WOULD I do with the money. . . . . )

Apr. 06 2012 11:41 AM
Tim from NYC

I live in Harlem and I see people who are barely "middle class" waste their hard-earned dollars on scratch tickets etc. I've always felt that the lottery is not only a self-imposed tax but it's also immoral for our government to promote a system that offer virtually 0% chance of winning.

Apr. 06 2012 11:40 AM
Patrick from Bayside, Queens

I have a year subscription to MegaMillions. I desperately want to be filthy rich, but the work and/or moral transgressions necessary to get there are not worth it.

So I've got to be in it to win it, even though I know my chances are essentially 0.

I like the idea of the lottery-for-savings. They could also try a lottery-for-filing-your-taxes.

Apr. 06 2012 11:40 AM
John from NYC

This may be a question for another guest on another show. How much money does New York State collect for New York State finances in a given year? Given the issue of the N.Y. State budget, the proceeds from the lottery seems significant. Supposedly the intent of these funds is allocated for education. Is this still the case? Maybe the next time you have the New York State Controller on the show, he could give us an overview.

Apr. 06 2012 11:40 AM
LA from LA

$1's worth - that's it. Anything more than that does not do much for your odds, and if I don't play I can't win.

Apr. 06 2012 11:39 AM
fred

What percentage of those "playing" the lottery are on public assistance....food stamps, Medicaid, etc.? And since money is fungeable, it seems there's something of a social problem here. No?

Apr. 06 2012 11:38 AM

Back in 1976, when lotteries were newer on the scene, NJ ran a lottery that offered $1,776 per week for life. $92 grand a year seemed like a princely sum. Who could ever spend so much money!!

Flash forward 36 years...$92 grand per year (for no work) is still a lot of money but only about double the national median - and probably below the median family income Manhattanites.

Apr. 06 2012 11:38 AM
John A.

I like the irony that the Lottery was passed on the basis that it would pay education (for knowledge) but then advertised as "You Never Know".

Apr. 06 2012 11:35 AM

I play the lotto because I think it's the best way for me to get my tax dollars directly to public education!

Apr. 06 2012 11:33 AM
Tom from UWS

Fran Liebowitz put it this way:

I don't consider the Lottery gambling. When you gamble, there's a chance you might win.

Apr. 06 2012 11:33 AM

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