Last week, Democratic presidential hopeful, Sen. Hillary Rodham Clinton proposed the idea of giving every child born in the U.S. $5,000 “to help pay for future costs of college or buying a home.”
Clinton said such an account program would help Americans get back to the tradition of savings that she remembers as a child, and has become harder to accomplish in the face of rising college and housing costs.
I fail to see how a wildly expensive and indiscriminate government handout would encourage people to save. “No strings attached” entitlement programs have precisely the opposite effect.
She argued that wealthy people “get to have all kinds of tax incentives to save, but most people can’t afford to do that.”
I read “every child born in the U.S.” as those born to wealthy people as well so I don’t get how this favors “most people.” Additionally, the tax code already provides personal exemptions based on the number of dependents in a family, thus attempting to help large families.
“I think it’s a wonderful idea,” said Rep. Stephanie Stubbs Jones, an Ohio Democrat who attended the event and has already endorsed Clinton. “Every child born in the United States today owes $27,000 on the national debt, why not let them come get $5,000 to grow until they’re 18?”
I fail to see why the enormous national debt, broken down by child, serves as a good selling point for this idea.
The New York senator did not offer any estimate of the total cost of such a program or how she would pay for it.
The cost is absurdly easy to calculate: $20 billion (4 million babies born in the U.S. times $5,000 equals $20 billion annually if the birth rate remains the same). That’s real money and if it could be found, it might better be used resuscitating the Social Security program.
This topic was recently written about at MSN and DR gives a good list of potential problems with this at the DoughRoller Blog.
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