Once a land of savers, America is now the home of the thriftless. Americans' personal saving rate, in steady decline over the last quarter of century, finally plunged into negative territory this year. No surprise there. In modern America the struggle between debt and saving is a rigged contest. It's never been easier to borrow -- credit cards, subprime home mortgages, home equity loans, payday loans. But when it comes to saving, about half of American workers, including more than 8 million Californians, are denied the opportunity to save the way people save best: on the job, through payroll deduction to a retirement plan. That is a critical problem.

Retirement saving is one of the twin pillars, along with homeownership, of household wealth and security. With home equity declining -- for the first time ever Americans' equity in their houses has fallen below 50 percent -- money tucked away in pensions, 401(k) plans, and individual retirement accounts has become, in aggregate, the largest item on household balance sheets. The retirement savings system works reasonably well for well-paid workers and large businesses. They are likely to have the best pensions, and they receive most of the $100 billion in annual tax subsidies for retirement saving. But for workers in the bottom half, many of them working for small businesses that offer no retirement plan, the news is bleak. Under the current system, more than one-third of the young Americans will reach old age with no retirement savings at all, the Government Accountability Office projects. And because retirement savings also serve households as fail-safe protection against emergencies such as illness, disability, and death, the inability of many workers to save through their jobs leaves them vulnerable throughout their lives.

To tilt the balance back toward saving, the Assembly recently approved, and the state Senate will soon consider, legislation to create Golden Dream Accounts -- voluntary, portable, retirement accounts available to every worker not covered by a retirement savings plan on the job.

The bill, AB2940 by Assemblyman Kevin DeLeon, D-Los Angeles, authorizes the California Public Employees Retirement System to offer the accounts, which would be invested in a short menu of low-cost indexed mutual funds. Every worker in California without access to a workplace retirement plan would be able to open an account and contribute to it, including by payroll deduction. The accounts, structured as IRAs, would be owned by the worker and move with her from job to job. The bill also authorizes CalPERS to offer what are called SIMPLE IRAs, plans that allow employers to match employees' contributions. But the accounts would be totally voluntary for both employees and business; employers' only obligation would be to transfer workers' contributions to the account through the state payroll tax system or other mechanism the state provides. All costs of the program would be covered by fees paid by accountholders.

Golden Dream Accounts would be a big step toward closing the retirement savings gap, helping workers and small businesses alike. That's why the legislation also enjoys strong support from Gov. Arnold Schwarzenegger, small business, local chambers of commerce and AARP. The only opposition comes from Wall Street, which recently took time out from seeking federal bailouts for its missteps in the subprime mortgage debacle to warn against interfering in the market to help more workers save. But here the market has plainly failed. It manages to provide employer-sponsored retirement plans to only half the workforce.

Three decades of market failure is enough. It's time to try something new: Let's leverage government systems already in place to offer, at no public cost, a retirement saving opportunity to every California worker and small business that doesn't now have one.