Imagine a world where every baby received a trust fund at birth. It might sound like a fairy tale, but being born into money—or at least into a $500 savings account—could soon become reality for all children born in the United States. Lawmakers are considering a bill that would give each newborn just that, with the goal of promoting savings that would later be used for education, a first home, or retirement. Here's what you should know about the ASPIRE ("America Saving for Personal Investment, Retirement, and Education") Act:
How would this program work?
The ASPIRE Act would give each child born in the United States a $500 savings account. Recipients could then use that money once they were older to pay for education, a first home, or retirement. Low-income children would receive additional funding, and all participants could add to their accounts over time. [...]
Why not just give the money to low-in come people who really need it?
Entitlement programs that benefit everyone, such as Social Security and Medicare, tend to enjoy more widespread support and therefore last longer. Programs aimed exclusively at lower-income groups, such as welfare programs, often attract more controversy and receive less political support.
"The important thing is that everybody gets an account," says Cramer, and that it's opened automatically so families don't need to take much action. It would still be a progressive program, he adds, because as the ASPIRE Act is currently written, poorer families would receive additional funding.
So, let's see--we should give every child born in America $500 to encourage savings, because handing out government money collected from others (mainly the middle class) is a good way to teach people personal responsibility and the need to invest their own money in themselves...no, wait. Okay, we should give $500 to every child born in America, because no way is that going to make pregnant women rush to enter our country illegally, since...no, wait again. Okay, we should give every rich person $500 for each of their children even though the stroller waiting for the new baby at home cost twice that much because...no; wait.
I give up. Why should we do this, exactly?
If the position of the federal government is that parents are too stupid to save money for their children--well, that's pretty risible; not every parent would agree that each baby needs his own little bank account in order for family savings to take place. If the idea is that people can't afford to do this--well, again, how much will this program end up costing the average middle-class family in tax dollars? I'm guessing it will be more than $500 over the course of a lifetime. If the idea is that by placing restrictions on how the money is to be spent, eventually, the government is teaching responsible spending--well, one look at the federal deficit is enough to drive home the point that this is a "do as we say, not as we do" moment.
The U.S. News and World Report article mentions that the program will cost around $37 billion in the first decade. Considering that it would be possible (assuming my quick math is correct) to give just about everybody (not just the newborns born in the next ten years) in the US today $121.00 by dividing that amount of money by the roughly three hundred million of us there are in this country, I'm guessing that a lot of this $37 billion is going to end up disappearing in that mysterious black hole that seems to form every time Congress confiscates a little more of Americans' hard-earned cash for some apparently noble and selfless purpose.