Thursday, October 08, 2009

ASPIRE Act: Redistribution On Deck

It was almost precisely two years ago that I wrote a blog entry entitled "ASPIRE Act Doesn't Inspire Me Much".

Somehow I lost track of the ASPIRE Act after that. Can't imagine why, given the economic events that got rolling around that time. [/snark]

Guess what? Looks like the idea hasn't died:

US News: Coming Soon: $500 for Every Newborn?

I didn't like the idea two years ago.

I don't like it now.

You know what such an idea screams to me? It says, Let the government "care" for you — cradle to grave. After all, we know what's best.

Or maybe I'm just imagining things.

The purpose of the accounts, says Reid Cramer, director of the Asset Building Program at the New America Foundation, is to get people invested in their future.

Handing someone $500 (or more) at birth, when they've done precisely ZERO to earn it. Sounds positively ... redistributive.

"Having an asset has the potential to change the way people think and plan for their future, and sometimes those effects can be generated just from small asset holdings," Cramer says, adding that it's possible for people to build up significant savings over time. The ASPIRE Act also pairs the creation of the accounts with financial literacy programs in schools.

Financial literacy programs, I'm all for. The rest of Cramer's spiel, though, is trash. There are other motives at play here. I just can't put my finger on them.

"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.

Yeah. Progressive.

Kind of like cancer is "progressive."

Lawmakers are expected to reintroduce the ASPIRE Act before the end of the year, and it already enjoys bipartisan support.

Now there's a surprise. NOT.

The main challenge for supporters will most likely be over how to justify the cost at a time of great budget deficits and competing demands for federal dollars.

Cost? What cost? A few clicks on the FedRes mainframes, and WHAMMO you've got brand new cashola, ready to be spread hither and yon. We've established this.

Critics argue that the program would simply create another costly entitlement program.

That'd be a fine argument — except that creating costly entitlement programs is usually the unspoken goal of vote-buying politicians.

Am I alone in my displeasure on this?


— Posted by Michael @ 8:14 AM


I have not researched this particular bill, but I entirely agree that costly entitlement programs (such as Medicare and welfare) are highly detrimental to our economy. Thanks for writing the truth!


You're absolutely not alone. If everyone is given $500 and "everyone" pays taxes, then aren't you just taking $500 from people to give them $500. The answer is no, because not everyone pays taxes. So this bill is redistributive in this way, but also by the fact that the bill states low-income newborns can get more than $500.

It's a BS bill. Hope and change and BS.

Anonymous Brandon Anderson
, at 10:12 PM, October 08, 2009  

I want my $500. So do my kids. Where's my money? Oh, wait, it's in social security, which I've been paying since I'm 16. I'm now 34. When I'm able to retire at 73,it won't be there. I hope this ASPIRE money doesn't go into a "trust fund" that the government borrows against. Then there won't be anything.
Also, how's the account supposed to grow. Is it invested for the babies? If it is, I don't see any good coming out of that. Savings accounts do not pay much interest. We could invest it in the stock market, but since companies are being told to not take as many risks, I can't see that working very well. And what would $500 be worth in 18 years? I don't believe all that much.


$500 for making babies.... great deal. In just 4 days I will get my first Social Security check and I want all of you to keep making those babies - I might live longer than they predict.

OK, I'm just kidding about the making babies. Ginger is right $500 to day might get you a tank of gas in 18 years - if there is any.

** Comments Closed on this Post **

Thoughts on my personal finances, goals, experiences, motivations, and accomplishments (or lack thereof).

My financial life began turning around when I took responsibility for it.
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