As you know from reading the economics section of my website, I envision the government building up its wealth until interest rates are zero. The strongest argument against doing this is that it would make people worse off because they would prefer to consume more now than to save (indirectly through the government saving).

What I am exploring here is the possibility that people aren’t very good at making decisions over time. If they aren’t, the forced savings through government taxation might not make people worse off. In fact, it could make them better off.

What are you measuring “best” by? For some measure of the overall society benefit, or from the individual’s point of view?

Your examples seem to be about maximizing individual “happiness”. Whether you enjoy a medium coffee today more than a large coffee tomorrow seems to be a fairly fine decision point. In judging savings, I’d say that a more important measurement would be whether people can support themselves through retirement, ideally at their target standard of living. But if someone chooses to live it up when they’re young at the expense of a modest retirement, or vice-versa, I don’t see how it really matters.

Eric