Better Preparation for a Rainy Day

Source: Show-Me Institute
by Elias Tsapelas

“Imagine opening a savings account so that you can put aside some money in case of an emergency. But when you go to the bank, the bank won’t allow you to put as much money in the account as you think you’ll need. And when an emergency arises, you are only allowed to withdraw half of what you had put away. That wouldn’t be a very helpful savings account, would it? That’s essentially how Missouri’s rainy-day fund works today. … While some of the limitations placed on the fund’s use are likely an effort to ward against improper overuse and needed, there’s a fine line between discouraging bad behavior and encouraging inaction. In fact, ever since this version of Missouri’s rainy-day fund was created in 1999, it’s never been used for anything other than cash-flow assistance.” (06/03/21)