Gets to the heart of the problem.....Self Discipline.
The Government can't nor should it be expected to regulate Self Discipline...
Can't afford the house....don't buy it
Need liquidity for a special circumstance....withdraw YOUR money from YOUR 401-K...
Defining the allowable circumstances or limiting the amount of allowable withdrawal might makes sense...
Having been unemployed for an extended period now, a couple of things have not made sense to me....
I can collect Unemployment ( a fund which I have paid into my entire working life) but I need to pay Taxes on it
Need to withdraw my money from my IRA Rollover....I have to pay taxes AND a Penalty for early withdrawal...Shouldn't extended unemployment in a recession be a good enough reason to waive the penalty? It is my money I earned, afterall