I'm fine with this other than it's funded by taxpayer money. Robbing Peter for Paul no matter the outcome is still a crime. We already have enough police problems in this country, we don't need to put more non-violent people in jail if they don't want to participate in the system.
Instead, an alternative should be financial literacy so that people _want_ to do this organically. This sort of leadership is more likely to 'stick' and promote long term lasting effects rather than forced behavior under the threat of duress. It also removes any incentive for bad behavior by political parties "yeah, if you don't drive the right car, or get the right degree, or do xyz, we'll withhold access to your baby bond account"
Are you seriously arguing that teaching minimum wage parents who live from hand to mouth "financial literacy" would allow them to invest savings for their newborn?
And are you suggesting that tax evading milionares and billionaires are the reason for high incarceration rates, instead of racial and class injustice, bad incentives through privatisation of the justice system, and a failed drug policy?
What effect did government backed student loans have on the tuition prices? Why were soldiers targeted by payday loan outfits? How are most lottery winners paid out? Answer any one of those questions and you'll answer your own question.
It would be a lot more interesting if the investments were in clean energy, life sciences, the types of things that would make someone's life much better once they are an adult.
It would make the rich richer. The 501:st company will be less valued than the 500:th that is included in some index.
You’d have to counteract that somehow but otherwise not a bad idea.
This applies to all the traditional retirement accounts invested in index funds as well, so i think your criticism is not specific to this particular program
What do people think of this? Does anyone know of an analysis against it? (And for it?) Seems like it would be inflationary, to have millions of 18 year olds suddenly have an order of magnitude more wealth than they do today. Could help level the playing field a bit. I would be upset to be born the year before this was introduced though....
While well intentioned, we know who's going to absorb all this money from 18 yr olds. Tuition rates will go through the roof since 50k is basically the new zero.
I think things work best when we make investments in a good future even if we wouldn't enjoy the fruits. I would also be jealous but I would not let myself rob others of benefits out of spite. I still don't know if it would be a good idea...
I think this common gripe "I'd hate to be the one just before this mass relief" has more to do with the direct costs to oneself rather than some desire that others suffer.
In this case, if the graduating class right after you got a big leg up, that means they're more competitive and coming for the same jobs / opportunities as you. 2020 grads were competing with (and still are) the same new grad jobs as the 2021 grads with the pandemic. College loan forgiveness means those 3-5-10 years behind you now have a big cash leg up on you with years less work and investment. This $1,000 check at 18 means the 19 year olds may very well fall behind as those younger roll over them.
I'm not saying all these concerns come to fruition, but a leg up to your peers can have negative ramifications for you, even if the aggregate and future prospects for the aggregate is good.
I don't think this would be printing money? I'm also not saying this is a good idea but it does sound like it would be supported by taxes. I may be misunderstanding what you mean by printing money.
Since the government can and does run infinite budget deficits, it's effectively printed. Sure, some is coming from taxes, but it's pretty unlikely that taxes will go up by an amount equivalent to the program costs.
Economically, inflation is equivalent to a tax on dollar-denominated held wealth, though. So it basically amounts to the same thing as taxes, but is paid for by bondholders, pensioners, people with fat savings accounts, and folks who lack bargaining power in their wages (i.e. most service & manufacturing workers) rather than high-earners.
It doesn't actually matter. You can s/printing money/anything the government does with money/ because the government does not typically produce a net gain in resources. That is done by labor and resource extraction.
Planting a tree is an investment in the future. Paying someone to dig up a tree and replant it in your yard is not.
If done in isolation, it'll mean the price of college will go up and a lucrative industry of ways to scam 18-year-olds out of their baby bond money will spring up. Also, it's going to pad the accounts of whatever banks or mutual funds are chosen to administer the system.
If I were tweaking the program, I'd make it so that you could withdraw 5% of the value of your savings account each year from 18-22, 10% from 22-25, and get the balance at 25. Give people a chance to learn how the real world works and get scammed with lower dollar values before dumping all this money on them. I'd also consider just making it an outright grant at the time the money goes to the person, rather than a savings account with an accruing balance. This cuts down on the amount of graft that the financial industry can manage, makes the government expenditures more predictable, and eliminates potential injustices based on how well the money is invested.
We have a coming of age passage where 18 year olds already spend absurd amounts of money on consumption goods, frequently with loans they cannot discharge in the event the passage fails (university).
In principle, just giving new adults the money directly to light on fire as they see fit shouldn't be inflationary.
'Booker, who introduced the legislation along with Rep. Ayanna Pressley (D-Mass.) said that because the “opportunity accounts“ would be interest bearing — paying around 3 percent annually — a child could have up to $50,000 by the time they turn 18.'
lol, if it is designed to stay a point above the Fed's intentionally set inflation targets - what do you think happens to interest rates? This is worse than printing money - it is more like printing money presses.
Alternatively they could abolish student debt instead of adding more fuel into the fire. Expensive, but it would free many from a lifetime of payments.
Instead, an alternative should be financial literacy so that people _want_ to do this organically. This sort of leadership is more likely to 'stick' and promote long term lasting effects rather than forced behavior under the threat of duress. It also removes any incentive for bad behavior by political parties "yeah, if you don't drive the right car, or get the right degree, or do xyz, we'll withhold access to your baby bond account"