“I like the idea of giving every baby born in America a $5,000 account that will grow over time, so that when that young person turns 18 if they have finished high school they will be able to access it to go to college or maybe they will be able to make that downpayment on their first home,” she said.
Uh, by “give” do you mean take $5,000 from the money raised through various taxes and handing it back out to every newborn? That’s not really so much of a gift as it is a re-distribution, but I’ll play along.
So who will administer these gifts? Are they willing to work for free? I’m assuming not, so let’s add a little bit to each of these gifts to collect from the taxes and hand it back out. A dime each? Maybe if this were private industry, but we’re dealing with government, so it will be more like $1 each. With 4 million babies being born each year, that’s $4M in overhead alone.
I like this idea of “grow over time”. Is this going to “grow” like the national debt or social security shortfalls? Will it grow like the federal budget? Will it grow like the effective tax rate? Hmm…it doesn’t seem like the federal government has a good track record in growing anything that benefits the public financially, does it?
I’m assuming from the article that this would be some kind of bond? If so, it seems to me this is what you are proposing, step by step:
1) Take money from some people
2) Pay the salaries of the people you hire to do the taking
3) Pay the salaries of the people you hire to give out money
4) Give whatever is left from step (2) and (3) to some people, in many cases the same people you took it from in step (1)
5) Instantly loan this money to Uncle Sam at a low interest rate
6) Eighteen years later, wonder why Uncle Sam can’t repay the loan, never realizing that this, along with other ingenious ideas, have crippled the middle class financially to the point that are more people in step (4) than there are in step (1)
I’ve got an idea. Let’s eliminate at least one ponzi scheme we already have going before we start another one.
Doug Mataconis at TheLibertyPapers has scienced out all the math–$12,492,000,000 for a year’s worth of babies.