Hillary Clinton’s proposal to give a $5,000 bond to every newborn has received a lot of attention, and most of it critical. Today, the Chicago Tribune’s editorial board gives it a once-over, noting the silly arguments that Democrats have used to excuse Hillary’s pandering. The Tribune advises Democrats to let Hillary’s baby boon die a natural death.
At Heading Right, I take a look at the proposal that one can spend their way out of a deficit — a notion not completely restricted to Democrats, either. This case is so blatantly transparent that other Democrats might be doing Hillary a favor if they just shut up and pretend she never said anything.
4 thoughts on “Hair Of The Dog”
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Much as I hate to admit it…this idea may have some merit. However, not for tuition or a house, but as a means to replace Medicare/Social Security.
Approximately 4 million babies are born in the US each year. Give each of them (born to US citizens only) a payment of between 5-10k at birth, and place it in a Roth IRA or other retirement vehicle. You can also add to the account once you enter the workforce. Best of all, Congress can’t get their grubby little hands on the money……it is yours.
Long term compound interest works its usual miracle. And we replace entitlements costing hundreds of billions of dollars a year (I think SS is something like 700 billion?)with one that costs 40 billion annually. How’s that for shrinking the size of government at a fairly low cost?
No matter how you cut it, its a bad idea for everyone except Hillary.
Whatever you allow the money to be used for, its price will increase at the same rate as the $5,000.
As soon as the Gov’t pays for something and there are no consequences for people, there is no value attached.
This is simply Hillary saying, “I’ll pay you if you vote for me.”
because this is something I know about (compound interest) I can do some quick math on those numbers. The idea of giving newborns lumpsums instead of Social Security has been floating around for literally decades now (Kemp, Forbes is two that I first saw talk about it in the ’80s).
Lots of benefits to it. If you pass away say at 58 instead of being having your $255 benefit you actually leave something to your heirs. Like 150,000, minimum. Using the miracle of compound interest and starting with $5000, retiring at 65 at 6% its about 220K, at 8% its 740k. And get this, at 10% its 2 and a half million dollars. Yes the number get ridiculous very, very fast.
No Congressional borrowing, increases America’s saving rate exponentially, no using it to add money to the Treasury, eliminate the SSA. Now, something tells me that when Hillary sees the plan presented in this manner, its a big ‘nevermind’.
“The inherent vice of capitalism is the unequal sharing of the
blessings. The inherent blessing of socialism is the equal sharing of misery.” Winston Churchill
Hillary could care less about the “children” as an earlier thread about the SCHIP memo pointed out. All her ideas when broken down are all Socialist intended. The SCHIP program was just a hook.
By giving children $5000 at birth she’s hoping to create mentally indentured servants to the state as they grow up mistakenly thinking the state has provided for them. The same can be seen with older folks thankful for social security, medicare etc not realizing that by creating these ponzi schemes the government caused two destructive events. One, it undermined the average person taking care of themselves and two, yet more importantly, it prevented the free market from operating to provide a needed service. The government, once it gets involved, pollutes the background such that entrepreneurs rarely want to get invested.
“The American people will never knowingly adopt socialism, but under the name of liberalism they will adopt every fragment of the socialist program until one day America will be a socialist nation without ever knowing how it happened” (Norman Thomas, 1936 presidential candidate on the Socialist ticket)