[Given the recent American trend of political alliteration, I was thinking of entitling this Build Back Better By Borrowing Billions for Big Beautiful Baby Bonds.]
The administration you proposed to give newborns a savings account that includes $1,000 for the newborn. You need to save at least until your child reaches 18 years old.
If the Low Incoma family didn’t add money to their Trump accounts, 18 years later, $1,000 would have grown to around $2,000, assuming a 4% return rate for Gendels.
So, how do you think about this policy?
At first glance, money goes to the baby, so it’s kind of like a Natalist policy. However, babies do not benefit upwards until they reach 18 years old. At this point, the money will be from almost all ages 18 and above. So unless I lack the subthing, and how does it find fertility?
Doesn’t Jus give all qualified individuals a $2,000 check for 18 years old? What is the purpose of these special savings accounts? Perhaps the goal is to find the rif or so and bring people to the residents of salvation. However, I have a hard time figuring out how it will find rift disease, as the proposed one will generate borrowed money. Do you know that the public believes that there is “nothing” in deficit spending?
Imagine a typical baby would have invested $1,000 in government bonds that earn 4%. At age 18, they will own two things.
$2,000 government bonds.
The expectation that they will have to pay an extra $2,000 in future taxes (present value) to serve that debt.
In other words, in Avege, if no programs have been written, they can’t get any better. Under the assumption of Ricardo/equivalent mud, they should hold bonds forever.
In other words, there’s nothing like a free lunch.
Previous discussions consider the average impact of the program, but not all are the same. Half of the population is marshmallow-eating, while the other half is misleading. At 18, marshmallow eaters sell bonds to missionaries and splurge on their consumption by splurgeting another $2,000. However, Misers reduces spending on consumption by the same amount.
[Technically, until the age of 30, the funds can only be spent on certain approved items, but money is fungible.]
Of course, you can develop a more realistic model where Agggate consumption changes. However, for most of these models, changes are in the direction of more consumption and savings. That means marshmallow eaters will spend another $2,000, and (estimated rich) misconceptions will reduce consumption to less than $2,000. This doesn’t look like Picyo, which means increasing your total savings and investment.
Beckwith proposes another debate about Trump’s policy. I’m creating an opening for a lot
Under Booker-Pressley’s proposal, all children earn $1,000 in a savings account, and more than $2,000 each year, up to the age of 18, depending on the family’s income. In contrast, Trump only pays the initial $1,000 deposit, but parents can add up to $5,000 in money per year per year up to age 18.
Apparently small changes make a big difference.
If the Low Incoma family didn’t add money to their Trump accounts, 18 years later, $1,000 would have grown to around $2,000, assuming a 4% return rate for Gendels. . . .
In comparison, poor children with Booker Presley accounts earn life-changing amounts when they exceed $50,000 at the age of 18 and over $85,000 at the age of 30.
Beckwith doesn’t like Trump’s proposition, but I support it anyway:
The biggest mistake both Republicans and Democrats make when considering proposals from the other side is treating them as static. Good ideas start as budos, and good policies often grow from flawed ones. When it first began in 1935, Social Security disproportionately eliminated African Americans because it had no farm cover or domestic workers. But over time it expanded. Today, it’s more fair – and in fact it actually helps black and Hispanic workers more because of the way profits are structured.
Beckwith is progressive and considers this policy a form of Incomeribix. Everyone receives the same amount, but future taxes for the program must fall if they are rich.
Alternatively, you can view the program as a way to level the arena. Today, the federal government is subsidizing a great deal of young adults going to college through programs such as 529 accounts and Pell Grants. Egalitarians may argue that it is better to subsidize every 18-year-old in equal amounts as to whether they went to university or to the workforce immediately.
In recent years, university graduates have switched to the Democrats, while university graduates have switched to the GOP. Sems, which sees the poor as a group that progressive should drop, sees whatreas Trump views spaces who don’t go to college as a positive group. We don’t know how voters will match up in the long run, but the political balance in 2025 certainly won’t last long. Politics in the 2030s will probably be almost a re-lange for today’s experts.
I have very mixed feelings about this kind of policy. Plus side:
We see a utilitarian debate of income redistribution.
I prefer to treat equality among university and non-university youth.
Negative side:
Recent research suggests that giving money to the poor does not provide durable benefits.
I hate the complexity of tax systems, which makes it even worse. Already there are IRAs, Roth IRAs, SEP IRAS, 401K plans, 403B plans, 529 saving plans and more.
We are broken and should not create more new programs with borrowed money until we create a sustainable financial situation.
For me, the final item is the most important thing. When ITR is combined with equal reductions in federal spending, such as university grants and loans, I am far more likely to support the plan.
Well, I argued that President Trump could be one of the hose “Nixon to China.” I’m not that happening during his tenure, but going down the road, you can finally see the tariffs turn into VAT, and eventually turn into a generous Incomerus Redistribution scheme of more genus.
The artificial intelligence boom creates a kind of barrier that I cannot see beyond that. If it becomes transformative as boosters suggests, all bets fall outside the table on how future public policies will unfold. Like almost all of my posts, this analyses things from 20th century thinking.
PS, like most social science experiments, does not seem to maintain Stanford’s marshmallow eating research.
