Hillary floats an idea whose time is not coming, even though it came from TIME - a national-service Baby Bond:
Clinton: $5,000 for Every U.S. Baby
WASHINGTON (AP) —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.
Clinton, her party's front-runner in the 2008 race, made the suggestion during a forum hosted by the Congressional Black Caucus.
"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.
The New York senator did not offer any estimate of the total cost of such a program or how she would pay for it. Approximately 4 million babies are born each year in the United States.
...Earlier this month, Time magazine proposed a $5,000 baby bond program.
Here is the notion as described by TIME:
1. Create a National-Service Baby Bond
Every time an American baby is born, the Federal Government would invest $5,000 in that child's name in a 529-type fund — the kind many Americans are already using for college savings. At a rate of return of 7% — the historic return for equities — that money would total roughly $19,000 by the time that baby reaches age 20. That money could be accessed between the ages of 18 and 25 on one condition: that he or she commits to at least one year of national or military service. Like the old GI Bill, the money must be used to fund education, start a business or make a down payment on a home. The bond would preserve the voluntary nature of the service but offer a strong incentive for young people to sign up for it. Says City Year CEO and co-founder Michael Brown: "It's a new kind of government philosophy about reciprocity. If you invest in your country, your country will invest in you."
Economist Greg Mankiw tries to tackle this proposal with logic:
How might this be funded? There are only three groups that could be asked to pay for the new entitlement with higher taxes (or lower benefits): the current elderly, those currently of working age, or the same future generations who are getting the new benefit and are slated to pay for existing unfunded entitlements. Which group do you think Senator Clinton has in mind?
Only three groups? Please - Hillary will fund this by taxing group four, "the rich", regardless of whether they are old, working, or just playing with the silver spoons in their mouths.
I am sure there are plenty of awkward questions raised by this proposal but here are a few:
1. Are the children of illegal immigrants born in this country (and hence American citizens) eligible for this entitlement? If so, is this really the sort of have-your-baby-here incentive that is likely to fly during the current immigration debate? Or if not, how could anyone justify their second-class citizenship?
2. How about the eligibility of children born out of wedlock - will the pro-family crowd want to offer $5,000 bonuses to illegitimate kids? And by the way, does anyone even say "illegitimate" anymore?
3. If this is such a great idea is there any particular reason not to include current one year olds? How about two year olds? Five? Fifteen? Where does one draw the line?
4. The only condition mentioned by TIME for claiming the money is "he or she commits to at least one year of national or military service". That's it? How about requiring a high school degree or GED? How about a "no criminal record" rule?