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October 07, 2007
Baby Bonds
by Nicholas Beaudrot of Electoral Math
At least the LA Times is considering this idea on the merits. Encouraging working Americans to save and build assets is a key part of building the middle class. Baby bonds are something that anti-poverty-centric candidate John Edwards has said good things about these sorts of plans before. As far as I can tell, the points against the idea are:
- It came out of Hillary Clinton's mouth
- Republican candidates came out against it
- The name "baby bonds" somehow makes it sound unserious
None of which are good reasons to oppose her policy. Bill Clinton supported a very similar looking proposal for cleverly named Universal Savings Accounts ... or "USA Accounts", for maximum political advantage. Sadly, most links to Clinton's proposals consist of right-wing "think tank" pieces opposing the idea. But it was important enough to Clinton that they made it into his final State of the Union address.
October 7, 2007 | Permalink
Comments
I was under the impression Hillary said something like, "she would be open to the idea of giving $5,000 to each child"... I'm not sure what she said exactly, but I felt she left it wide open...and it was, more or less, a way to come off representing "change" in washington when she was being battled on the issue.
Posted by: Steven | Oct 8, 2007 12:03:05 AM
Given that Wall St financial services firms will manage the accounts, you would think Republicans would be all for it.
Posted by: bob h | Oct 8, 2007 7:44:32 AM
I really never understood the Clinton's reliance on right-wing solutions to left-wing problems. You want everyone to afford college, and to be capable of saving, you try and pass universal higher education bills and increases wages so people can afford to save. You don't say 'here's 5k you can spend in 20 years'. I'm all for the government simply giving people money, but real solutions for these problems are needed. Fake solutions don't really help anyone.
Posted by: soullite | Oct 8, 2007 7:50:42 AM
"But seeing as how Democracy can only last as a form of government until the people discover that they can vote themselves largess from the Public Coffers..."
Posted by: El Viajero | Oct 8, 2007 8:32:35 AM
What soullite said.
Follow the cash flow. If these bonds simply emerge from thin air (which they appear to do) and 'appreciate' at some rate presumedly shadowing Treasuries all Hillary's plan would do is to commit the Government to spending x number of dollars per American over some range of allowable purposes at some point in the future, all with the only real world goal of appropriating Bush's fetish for an 'Ownership Society', with the illusion that this is not Tax and Spend but something else.
Until self-styled Progressives get out of their defensive crouches and embrace the legacy of FDR, JFK and yes LBJ we are not going to get anywhere. Too many young Progressives have simply adopted the Reaganite Framing and Hillary is a prime facilitator of that. Progressive Taxation works, Social Democracy works, yet mostly all I hear is some crybabies whining 'That sounds French!'
The Baby Bond is a figleaf behind which to hide government action. If you support using government money to promote social ends then do it openly. Yes I am a tax and spend liberal, and yes I wouldn't mind if the US ended up looking more like Sweden. Deal with it.
The only thing in the middle of the road are dead skunks and the DLC. If there is a distinction. Unleash your Inner FDR.
Posted by: Bruce Webb | Oct 8, 2007 12:13:10 PM
By the age of 18 a $5,000 Savings Bond could be worth $6,000 in constant dollars. US Savings Bonds pay something like 1% over inflation, don't they -- because they are the safest investment?
No joke -- if you give the average male $6,000 on the day he turns 18 he will probably buy a car and statistically he will crash it within a year, possibly killing himself. This is no joke.
But, I forget that at the top of the economy -- where our policy makers and pundits live -- every kid drives a beemer. On the other hand, the boys to whom $6,000 will seem like serious money (if next to nothing towards an education or anything serious) will be the ones who buy the crash cars.
Posted by: Denis Drew | Oct 8, 2007 1:00:13 PM
Yes I am a tax and spend liberal, and yes I wouldn't mind if the US ended up looking more like Sweden.
Looks like those that work pay upwards of 70% or more of their income in tax to be redistributed by the govenment. This must look like a dream to you.
"Sweden has a taxation system that combines a direct tax (paid by the employee) with an indirect tax (paid by the employer). In practice, the employer provides the state with both means of taxation, but the employee only sees the direct tax on his declaration form. The compilation of taxes that compose the final income tax (2003): tax on gross income from the employer: 32.82% (indirect, fixed), pension fee on gross income: 6.95% (indirect, fixed), municipal tax on gross income less pension tax and a base deduction: ~32% (direct, varies by municipality), state tax on gross income less pension tax and a base deduction: 0%, 20%, or 25% (direct, progressive)." --http://en.wikipedia.org/wiki/Income_tax
Posted by: El Viajero | Oct 8, 2007 1:11:59 PM
Certainly, it wouldn't take much research to find economists and others pointing out the downsides of this plan. Was google down when this was posted or something?
One major downside is discussed at the link, but there are no doubt many more discussed elsewhere.
Posted by: See the link | Oct 8, 2007 1:39:05 PM
Wow, if Denis is right, this policy is a truly horrible idea. I had no idea that greater than 50% of 18 year old males with cars crash and die within any given 12 month period. That would seem to be a much bigger problem than the lack of universal healthcare or anything else. Maybe we should ban cars.
Posted by: mike | Oct 8, 2007 3:33:26 PM
Car banner! CAR BANNER!!!
Posted by: El Viajero | Oct 8, 2007 3:50:27 PM
