Hillary: $5000 for Every Baby! (and a Car in Every Garage)
Filed under: Hillary Clinton, Liberals, Politics — marc moore on September 29, 2007 @ 2:18 am CEST
Democratic presidential candidate Hillary Rodham Clinton said Friday that every child born in the United States should get a $5,000 “baby bond” from the government to help pay for future costs of college or buying a home.
…
The New York senator did not offer any estimate of the total cost of such a program of how she would pay for it.
No, I expect that Ms. Clinton did not bother to explain that. Why hamper the process of buying votes with other people’s money??
Since I’ll be paying for this little ditty if Hillary gets elected I whipped out my little calculator post haste. I figure that it’s going to cost around $84 billion per year. Feel free to check my numbers.
Average stock market return: about 8%
Value of $5000 in 18 years at that rate: about $21,000
Babies born annually: > 4,000,000
Total: about $84,000,000,000 annually
Nice.
For perspective, this is about 5.5 times NASA’s current budget and 2.3 times the current amount spent on Food Stamps, which is to say a pretty big chunk of change. Where’s that money going to come from?
Here’s an idea: We could set that money aside now, in a sort of trust fund, so it grows with the economy. Then we won’t have to come up with a huge lump sum two decades down the line.
Sadly, we’re broke at the moment because of Iraq. Besides, the pork-barrel crowd would just raid the trust fund and spend the money on bridges to nowhere, etc., making us even worse off than if we didn’t plan ahead at all.
More:
Clinton said such an account program would help people 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.
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“I think it’s a wonderful idea,” said Rep. Stephanie Tubbs 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 their 18?”
Hill and Steph, it’s a bummer about the little problem we have with a national debt and all. It’s a minor detail, just a few trillion dollars, no biggie.
Personally, I say we need to eliminate that - hell, just stop the yearly bleeding, for Pete’s sake - before we start doling out the federal largess.
h/t memeorandum
1 jpe
September 29, 2007 @ 2:49 am CESTI think….she is talking about putting it aside.
It’d be like a defined contribution plan (and a good start toward fixing SS. In fact, it’s very similar to Mr. C’s plan.)
It sounds like it’s just gestating, but something like that could be a very good idea.
2 wj
September 29, 2007 @ 3:08 am CESTHow about figuring a face-value $5,000 bond for each child…and then calculating the current value by backing out inflation (say 4% per year for 18 years)? That gives a present value of a whole lot less. And experience suggests that we’ll get a spate of inflation well above 4% for a few years, which reduces the present value further.
Not arguing that the whole thing is affordable. It’s not. Nor that it might be a good idea. It’s not. But it makes the point more effectively to shrink the cost to something more accurate — and still find that it’s totally unaffordable.
3 Tully
September 29, 2007 @ 4:40 am CESTAnd a pony!
4 Donklephant » Blog Archive » $5,000 For A Kid?
September 29, 2007 @ 4:57 am CEST[…] Michael Van Der Galiën runs the numbers… Since I’ll be paying for this little ditty if Hillary gets elected I whipped out my little calculator post haste. I figure that it’s going to cost around $84 billion per year. Feel free to check my numbers. […]
5 jpe
September 29, 2007 @ 5:00 am CESTHere’s the Clinton I plan. Similar concept: it’s like a defined contribution supplement to the social security defined benefit plan.
6 marc moore
September 29, 2007 @ 6:04 am CESTOh, so this program would be managed like the social security trust fund?! That’s not helping! Where’s that money?? Blink and you’ll miss it.
wj is probably right in saying the interest rate would be < stock market values - that’s another big problem with the plan.
Assuming 4%, ~$2500 now would yield the magic $5000 at age 18.
That’s a mere $10 billion, cash up front. Certainly a better investment than many others we’ll make next year. But I’d like to see a higher rate of return - 4% is too conservative.
I’d rather have the pony!
7 Snorri Godhi
September 29, 2007 @ 9:30 am CESTMarc Moore appears to have little talent for numbers. With 4 millions babies/year, at $5000/baby, the total cost is $20 billions/year. Not $84 billions, and not $10 billions. $20 billions is less than $200/year for every working American. Looks like a good investment — as long as the money is in a trust fund, managed by somebody with a minimum of talent for numbers.
8 superdestroyer
September 29, 2007 @ 11:25 am CESTThe Democrats will neer allow it to be invested in a privately run program. How could the Democrats let people put in the money in a private program when they have spent years telling us how risky private investment is.
My guess it would be the equivalent of giving someone a U.S. savings bond which does great the $80 billion obligation.
9 Michael van der Galiën
September 29, 2007 @ 12:12 pm CESTThis is purely an American thing, but let me respond nonetheless: that’s a ridiculous statement. “Looks like a good investment.” Yes for parents to make. Clinton wants the government to do that.
It’s quite hilarious actually. We’ve got something like that as well, I’ll post about it later.
10 Snorri Godhi
September 29, 2007 @ 1:28 pm CESTMichael: you are right, I should have said: it doesn’t look that bad. More like a voucher scheme than like state education. At first sight, better than state universities charging lower tuition for students from within the state.
And yet, who will prevent the students from frittering the money away at a party school?
11 jpe
September 29, 2007 @ 3:43 pm CESTThis is incorrect. Private investment was the medium of the Clinton I USA Account plan. Why the objection to Bush’s plan & not the Clinton I/II plans? Well, the former is a carve-out; the latter are add-ons. There’s substantially more risk with a carve-out, because it’s all the citizen has got.
Interestingly, the GOP objected to Clinton I’s plan because it used private investment. The concern was that the government would have the ability to manipulate the stock markets with its massive holdings.
12 Neo
September 29, 2007 @ 4:23 pm CESTIs there really any difference between Hiliary’s plan and Bush’s plan for partial privatization of Social Security ?
Both take money from the public coffers and put it aside in private accounts outside of the public system. Both create the sense that there is a safety-net to the safety-net.
The target might be a bit different, but the plan is the same.
13 Tully
September 29, 2007 @ 4:35 pm CESTThe obvious on the numbers–if it were contained to government bonds as the “acceptable” investment vehicle, it’s no better than the SS trust funds. IOU’s from the government that taxes will have to pay. And the cost would be $20 billion /yr PLUS the interest on all previously-issued $20B years, PLUS the interest on the accumulated earnings in them.
That’s assuming that the $5000 baby bounty didn’t boost the rate of illegal immigrants bopping over the border to have their anchor babies.
14 Interested
September 29, 2007 @ 5:48 pm CESTit’s easy - you tax!
Please send your $200.00 c/of IRS, Washington DC.
15 jpe
September 30, 2007 @ 1:32 am CESTThe big difference between the Clinton I plan and the Bush plan is that the former was an “add-on” (ie, on top of the existing SS system) while the latter was “carve-out” (ie, it replaced part of the SS system)
16 Eric
September 30, 2007 @ 6:20 pm CESTSo let’s just look at history for a moment here. Social Security was created to give Americans the ability to have a retirement fund setup and managed by the Feds to bridge the gap between what employers were paying at the time and what would be needed in the future. How long was it before the lawmakers starting raiding that fund for things it was never intended for?
I think this proposal will go something like this. The money will be put into a “fund” the first 3-4 years. All of a sudden, Congress will see a big pool of money that is being “wasted”. They will move it to the General Fund and create all kinds of “wonderful” ways to spend this windfall of money. Now 18 years later when the first kid wants to withdraw, there’s no money in the kitty and now Congress has to pass a tax in order to keep the “fund” solvent and to create a “lockbox” for future generations.
Now here’s the next question. Hillary makes this proposal just as the Baby Boomers are about to retire in great numbers. The current estimates show that Social Security will begin paying out more than it takes in during 2012. The whole system will collapse in 2029 if something isn’t done about it. Should we take this $5000 per kid, dump it in Social Security and call it good? Then instead of failing the seniors, who should have known better and saved for their own retirement, we will have failed the poor, innocent children!
17 marc moore
October 1, 2007 @ 4:09 am CESTEric, that’s exactly how I think it would go. Better just not to even start down that road.
18 Black Shards, In Your Eyes, Blinding » Hillary’s Baby Plan Redux
October 2, 2007 @ 7:13 pm CEST[…] Chicago Tribune just published an analysis of Hillary’s plan that is rather similar to mine. Their conclusions? Well, the editorial is titled "Clinton’s baby […]
19 Hillary’s Baby Plan Redux « The Van Der Galiën Gazette
October 2, 2007 @ 7:15 pm CEST[…] The Chicago Tribune just published an analysis of Hillary’s plan that is rather similar to mine. Their conclusions? Well, the editorial is titled “Clinton’s baby […]
20 G G Smith
October 6, 2007 @ 7:01 pm CESTIf Hillary gets elected, the US will be a socalist country by the time she get out of office. She has nevefr worked in her life and thinks money grows on trees. She has no idea of the tax burden on working people. Just another liberal. If the poor wants money, let them go out and get a job like me.
21 tim smith
October 9, 2007 @ 7:25 am CESTI was ready to vote for hillary until I heard about the 5000 dollars, now I will have to find someone else to vote for. What about people that dont have kids, what do they get? Or is it a way to boost the population of the united states for the next war.
22 Alan
October 9, 2007 @ 8:19 am CESTTim Smith,
How cynical you are! Of course it has nothing to do with the “Long War”!
It is merely intended to encourage even MORE illegal aliens to come across the border, bail our Social Security, and build the Democratic voter base.
Let’s not impugn Ms. Clinton’s generosity regarding this wonderfully altruistic program! Why, I think they ought to throw in a free puppy and apple pie too!
23 Alan
October 9, 2007 @ 8:20 am CESTTim Smith,
How cynical you are! Of course it has nothing to do with the “Long War”!
It is merely intended to encourage even MORE illegal aliens to come across the border, bail our Social Security, and build the Democratic voter base.
Let’s not impugn Ms. Clinton’s generosity regarding this wonderfully altruistic program! Why, I think they ought to throw in a free puppy and apple pie too!
24 jeff moss
November 9, 2007 @ 12:42 am CETi absolutely love what alan said.
25 Chris
November 9, 2007 @ 12:50 am CETClinton made a good point: