I don’t always promote wild ass schemes in national publications…

…but when I do, my arithmatic is off by an order of magnitude!

How Giving $1,000 to Every Baby in America Could Reduce Income Inequality

The first iteration of KidSave, in simple terms, was this: Each year, for every one of the 4 million newborns in America, the federal government would put $1,000 in a designated savings account. The payment would be financed by using 1 percent of annual payroll-tax revenues. Then, for the first five years of a child’s life, the $500 child tax credit would be added to that account, with a subsidy for poor people who pay no income [tax]. The accounts would be administered the same way as the federal employees’ Thrift Savings Plan, with three options—low-, medium-, and high-risk—using broad-based stock and bond funds. Under the initial KidSave proposal, the funds could not be withdrawn until age 65, when, through the miracle of compound interest, they would represent a hefty nest egg. At 5 percent annual growth, an individual would have almost $700,000.

In a pig’s eye! Depending on how you compound it and when you apply the tax credits, it actually produces somewhere in the neighborhood of $70,000 at age 65. Figure a modest inflation rate of 3.5% and the purchasing power would be about $30,000 in today’s dollars.

Coming up next, the author will explain why recessions are the result of a Keynesian liquidity trap rather than bubbles resulting from malinvestment. That should be good.

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7 Responses to I don’t always promote wild ass schemes in national publications…

  1. Locke n Load says:

    I get about 69K at 3500 over 59 years (not paying interest first 6) but hey, who splits hairs ;).
    Great example of someone accepting BS at face value and never looking into it themselves. Screams govt shill, doesn’t it? A months rent on a studio apt in 2078 NYC assuming a low 5% annual increase and starting point of 2,000/mo will be over $47,000

  2. James says:

    The article says the Heritage Foundation supports Kidsave.
    When I go to the Heritage Foundation site, it says “Under the Kerrey legislation, every American child would receive a loan of $2,000 at birth from Social Security.”

    I think the Heritage Foundation writer is wrong in his ideology, but aside from that, one site says it’s a giveaway, the other, a loan.
    Now who’s dumb enough to think the “loans” won’t be forgiven and bailed out when most people won’t pay? The housing bubble was caused by high risk loans.

    Income inequality is not a problem. It’s the economic system working, using price to tell people how to allocate their most important resource – themselves. The only valid comparison to make is whether the common man benefits more in a society that enforces property rights, low taxes, and free trade, or all the rest. History has shown there is no other form of government that comes close as freedom and the free market in benefitting the common man.

  3. Uke says:

    Giving loans to newborn infants is perhaps only slightly less high-risk than giving them to admitted meth addicts.

  4. Ray Davies says:

    Right, government trust. Remember Social Security was supposed to be untouchable too. but they did it. The government will raid any account they damned well please,any time they please

  5. notamobster says:

    I personally wish the government would start some sort of untouchable program, whereby they deduct taxes from the earnings of every person in the workforce, set that money aside, and use it to fund an aging populace who didn’t plan ahead for their retirement.

    That sort of system sounds like a no brainer, that’s impossible to f-k up.

    • notamobster says:

      We could call it Saving Our Children, or Child Safety Net, or even Retirement Account Investment Deal, or… wait for it… Social Security.

      On a serious note, when did “Leave my money the f-k alone” become an unworkable model for governance?

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