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  1. Thread Author  Thread Author    #1  

    Default KidSave act

    Just heard about this today and I'm hoping it doesn't pickup steam again.

    How Giving $1,000 to Every Baby in America Could Reduce Income Inequality - NationalJournal.com

    It is called KidSave, and it was devised in the 1990s by then-Sen. Bob Kerrey of Nebraska, with then-Sen. Joe Lieberman as cosponsor. The first iteration of KidSave, in simple terms, was this: Each year, for every one of the 4 million newborns in America, the federal government would put $1,000 in a designated savings account. The payment would be financed by using 1 percent of annual payroll-tax revenues. Then, for the first five years of a child's life, the $500 child tax credit would be added to that account, with a subsidy for poor people who pay no income. The accounts would be administered the same way as the federal employees' Thrift Savings Plan, with three options—low-, medium-, and high-risk—using broad-based stock and bond funds. Under the initial KidSave proposal, the funds could not be withdrawn until age 65, when, through the miracle of compound interest, they would represent a hefty nest egg. At 5 percent annual growth, an individual would have almost $700,000.
    That was the first iteration of the plan, but they mention a second later on in the article. I'm sure they'd come up with another, more current, plan if introduced again. Either way, the government would be giving free money to people that didn't do anything to earn it, and then expecting them to handle it wisely (be it through qualified early withdrawals or in retirement). That's a pretty tall order. Almost as tall as me expecting the government to handle the funds wisely while in their "care."

    Having ample retirement and being sensible with it come from learning sound money habits, not being handed a million bucks (I'm figuring a higher earning than the article's 5%). Simply reading the stories about how winning big lottery payouts was the worst thing to happen to those people shows that wealth, or lack thereof, isn't a money issue. It's a personal issue.

    Yes, on paper, those numbers are quite nice. The return amount sounded pretty conservative to me, so it would probably be much better on paper. "On paper" doesn't take into account human nature, especially the nature of people you don't know. You take the average Joe at 65 that grew up poor and only lived a mediocre life and watch what happens with those retirement funds. They will live it up with the high life until all that money is blown and be right back where they started, if not worse.
  2. #2  

    Default Re: KidSave act

    How do you feel about rich people that setup trust funds for their kid? Let's say Mitt Romney sets up a $10 million dollar trust fund for each his kids.

    Your point was, "...giving free money to people that didn't do anything to earn it..." . Is giving a $10 million dollar trust fund to your kids ok? They didn't earn it, someone else did.
  3. #3  
    NoYankees44's Avatar

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    Default Re: KidSave act

    Quote Originally Posted by palandri View Post
    How do you feel about rich people that setup trust funds for their kid? Let's say Mitt Romney sets up a $10 million dollar trust fund for each his kids.

    Your point was, "...giving free money to people that didn't do anything to earn it..." . Is giving a $10 million dollar trust fund to your kids ok? They didn't earn it, someone else did.
    That is a private citizen's money. They can do whatever they please with it. Just like you or I can with ours. This is talking about the collective tax payer's money.



    This is just another attempt at wealth redistribution. It sounds sort of like the way SS was supposed to be set up. We all know how that turned out. No more mandatory savings accounts for me thanks. I can handle my own money and will make sure my children and others within my reach are taken care of. I do not need government bureaucracy to demand it of me.
  4. #4  

    Default Re: KidSave act

    Quote Originally Posted by NoYankees44 View Post
    That is a private citizen's money. They can do whatever they please with it. Just like you or I can with ours. This is talking about the collective tax payer's money.



    This is just another attempt at wealth redistribution. It sounds sort of like the way SS was supposed to be set up. We all know how that turned out. No more mandatory savings accounts for me thanks. I can handle my own money and will make sure my children and others within my reach are taken care of. I do not need government bureaucracy to demand it of me.
    You totally missed the point. He noted his concern as, "....giving free money to people that didn't do anything to earn it..." A trust fund also does that.
  5. Thread Author  Thread Author    #5  

    Default Re: KidSave act

    Quote Originally Posted by palandri View Post
    How do you feel about rich people that setup trust funds for their kid? Let's say Mitt Romney sets up a $10 million dollar trust fund for each his kids.

    Your point was, "...giving free money to people that didn't do anything to earn it..." . Is giving a $10 million dollar trust fund to your kids ok? They didn't earn it, someone else did.
    I would hope those parents are also raising their kids to understand personal finance, but it's their own money to risk. Not other's. Plus trusts are usually set up for a specific reason, like contingency plans should the parents die while the kids are still minors. You can also dictate the dispersment of the funds, such as so much for college, so much at certain ages, or a certain amount only if you finish college. Depending on how it's set up, it's not like the kids are automatically set for life and they have to show some responsibility to get the money.
  6. Thread Author  Thread Author    #6  

    Default Re: KidSave act

    Quote Originally Posted by palandri View Post
    You totally missed the point. He noted his concern as, "....giving free money to people that didn't do anything to earn it..." A trust fund also does that.
    You left off the first part of my sentence. The government would be giving out that money, and you can bet they won't teach you sound money.
  7. #7  
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    Default Re: KidSave act

    Quote Originally Posted by palandri View Post
    How do you feel about rich people that setup trust funds for their kid?
    It's none of my business that is how I feel about it. Just like it is none of a rich person's business what I give to my kids.

    Now if I am going to be taxed to take my money to give to the rich person and the rich person uses my tax money to fund a trust fund for their kids, well hell yeah I have something to say about that.

    Quote Originally Posted by palandri View Post
    Let's say Mitt Romney sets up a $10 million dollar trust fund for each his kids.
    That would be a problem for you, why?
  8. #8  
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    Default Re: KidSave act

    Quote Originally Posted by Mooncatt View Post
    You need to read the article, or heck, just the part I quoted.
    If I actually read an article before I commented on it I wouldn't be near as entertaining as I am, lol!
  9. #9  
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    Default Re: KidSave act

    I read the article as saying that EVERY child will receive the payments. But as usual on this forum, it will degenerate into an attack of the lower socioeconomic class.
  10. Thread Author  Thread Author    #10  

    Default Re: KidSave act

    Then I ask, who's most likely to squander the money, assuming the government doesn't first? Those raised in a rich family or poor? Personally, this is a disservice to everyone. Rich, poor, those paying, and those receiving.
  11. #11  
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    Default Re: KidSave act

    I see it as good iniative for any government anywhere. Societies are having a hard time worldwide with the elderly being under resourced for retirement. This programme will at least give a kick start to the next generations ability to have a dignified retirement. $3,500 per citizen to start an account is small change compared to the costs of welfare in the future. I agree these funds are open to abuse by both government and account holders, but it is a better option than having nothing.

    It is also good for the economy. These funds have to be invested, so it really is a win win situation. I would hate to see the state of the worlds investment markets without pension funds, currently somewhere north of $30 trillion dollars.

    As for who will squander their money, I think there is ample evidence of both rich and poor doing that. Generalisations are never really an accurate measure of any individuals behaviour. We are all still recovering from the squandering carried out by the worlds bankers, so I do not think the poor have a monopoly on this.
  12. #12  

    Default Re: KidSave act

    Quote Originally Posted by Mooncatt View Post
    You left off the first part of my sentence. The government would be giving out that money, and you can bet they won't teach you sound money.
    Then you're contradicting yourself by saying, "...giving free money to people that didn't do anything to earn it...". That's the way I read it.
  13. Thread Author  Thread Author    #13  

    Default Re: KidSave act

    Let's say you gave an adult that money as as a lump sum. Would you expect people to invest it all as was intended? Even if that was suggested, a relative few actually would. The rest would either be blown (bad) or spent on current bills (not as bad but you're still out all that compounded interest), or a combination of both. The only way to insure it's invested is for the government to hold it, effectively telling John Q Public they don't trust you to handle your own retirement. That's a pretty dangerous precedent to set, and steers us more to the cradle-to-grave government dependent society. Not to mention it's telling everyone else the government is taking more money from them to give to someone else for nothing in return, and just cross your fingers that the accounts aren't corrupted like Social Security.

    If people think this is such an awesome idea, why aren't the parents already taking that $500 child tax credit and apply it to an investment account on their own? After all, that money would be gone either way and doing it on your own both gives you greater control over the account and you can invest more than just the first five years of the credit. And if you don't like how the funds are performing, you can roll them over to any retirement fund you want, not just what is on the government approved list.

    Again it comes back to human nature, which that plan doesn't account for. Those with a good grasp of personal finance likely already have plans for their kids (as in what to do, not a specific retirement plan), and those without a good grasp are going to waste it and the kids will pick up those same bad habits.
  14. Thread Author  Thread Author    #14  

    Default Re: KidSave act

    Quote Originally Posted by palandri View Post
    Then you're contradicting yourself by saying, "...giving free money to people that didn't do anything to earn it...". That's the way I read it.
    You not paying attention to my point after I clarified your mistake is on you, not me.
  15. #15  

    Default Re: KidSave act

    Quote Originally Posted by Mooncatt View Post
    You not paying attention to my point after I clarified your mistake is on you, not me.
    Then we'll leave it at that, as my mistake, because all I am seeing is you contradicting yourself by saying, "...giving free money to people that didn't do anything to earn it..."
  16. Thread Author  Thread Author    #16  

    Default Re: KidSave act

    There was no contradiction, other than your perceived contradiction based on your selective quoting. Perhaps if I was more direct and simple with my answer to your question...

    Quote Originally Posted by palandri View Post
    Is giving a $10 million dollar trust fund to your kids ok? They didn't earn it, someone else did.
    If it's a private individual using their own money? Yes. Why? Aside from dictating the reason of the trust as mentioned earlier, they aren't taking money from anyone else to set it up, it's the parent making the choice for their kid based on their personal situation, and can insure accountability from the kid to receive said money. I.e. maintaining a certain GPA and not being a deadbeat.

    If it's government using public money? No. Why? Lack of control by the individual, it's money taken from everyone to fund, and it's given to you without question. There's no accountability for someone to demonstrate they deserve the money before getting it like in a private fund.
  17. #17  

    Default Re: KidSave act

    Quote Originally Posted by Mooncatt View Post
    There was no contradiction, other than your perceived contradiction based on your selective quoting. Perhaps if I was more direct and simple with my answer to your question...

    If it's a private individual using their own money? Yes. Why? Aside from dictating the reason of the trust as mentioned earlier, they aren't taking money from anyone else to set it up, it's the parent making the choice for their kid based on their personal situation, and can insure accountability from the kid to receive said money. I.e. maintaining a certain GPA and not being a deadbeat.

    If it's government using public money? No. Why? Lack of control by the individual, it's money taken from everyone to fund, and it's given to you without question. There's no accountability for someone to demonstrate they deserve the money before getting it like in a private fund.
    LOL! You're cracking me up tonight. Like I said, just blame it on my stupidity, I am good with that. It makes no difference where the money comes from, they're still getting free money that they didn't earn, which was your original argument.
  18. #18  

    Default Re: KidSave act

    Might work till the government decides it's a great pool of money to tap into that won't be an issue till many years later or inflation and senior car catch up to the massive $$ being put into the market
  19. #19  
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    Default Re: KidSave act

    Quote Originally Posted by Mooncatt View Post
    Just heard about this today and I'm hoping it doesn't pickup steam again.

    How Giving $1,000 to Every Baby in America Could Reduce Income Inequality - NationalJournal.com



    That was the first iteration of the plan, but they mention a second later on in the article. I'm sure they'd come up with another, more current, plan if introduced again. Either way, the government would be giving free money to people that didn't do anything to earn it, and then expecting them to handle it wisely (be it through qualified early withdrawals or in retirement). That's a pretty tall order. Almost as tall as me expecting the government to handle the funds wisely while in their "care."

    Having ample retirement and being sensible with it come from learning sound money habits, not being handed a million bucks (I'm figuring a higher earning than the article's 5%). Simply reading the stories about how winning big lottery payouts was the worst thing to happen to those people shows that wealth, or lack thereof, isn't a money issue. It's a personal issue.

    Yes, on paper, those numbers are quite nice. The return amount sounded pretty conservative to me, so it would probably be much better on paper. "On paper" doesn't take into account human nature, especially the nature of people you don't know. You take the average Joe at 65 that grew up poor and only lived a mediocre life and watch what happens with those retirement funds. They will live it up with the high life until all that money is blown and be right back where they started, if not worse.

    What if we take this idea, apply it to areas where drop out rates for kids is highest, and give kids an incentive to finish school either via towards their college education or vocational training?

    If you're against either, then I can't help wonder if there's an underlying reason for you to hate seeing the less fortunate, or the less entitled get a helping hand and a better life.

    Lets see, have you ever heard of the following quote?

    “Give me your tired, your poor,
    Your huddled masses yearning to breathe free,
    The wretched refuse of your teeming shore.
    Send these, the homeless, tempest-tossed, to me:
    I lift my lamp beside the golden door.
    I can't help wonder if some of you even know what it means to be American. Then again, we're not seen by the rest of the world in the same way we used to be seen, and that's a damn shame.
    palandri, msndrstood and A895 like this.
  20. Thread Author  Thread Author    #20  

    Default Re: KidSave act

    Quote Originally Posted by TXGTOU View Post
    What if we take this idea, apply it to areas where drop out rates for kids is highest, and give kids an incentive to finish school either via towards their college education or vocational training?
    There have already been a few schools doing something to that effect, and I believe it's shown some success in the short term. But that's not the same as KidSave. Under the idea you suggested, the kids are at least having to put forth more effort to get the money. If that's right or wrong is another debate, but it's not handing out free money and expecting nothing in return.

    I can't help wonder if some of you even know what it means to be American. Then again, we're not seen by the rest of the world in the same way we used to be seen, and that's a damn shame.
    Last I checked, being American meant going out and making your own destiny, not suckle at the government you know what from cradle to the grave. I dunno, maybe that just makes me old fashioned in my middle age.
  21. #21  

    Default Re: KidSave act

    Everyone would get upset about a program designed to help kids. At the rate things are going, people will expect poor newborns to work for minimum wage. Personally, if a man like George Bush can go on to be president because he has his family's oil money behind him, then I believe at risk children should get some help too.

    Sent from my SCH-I535 using AC Forums mobile app
    msndrstood and A895 like this.
  22. Thread Author  Thread Author    #22  

    Default Re: KidSave act

    Quote Originally Posted by nolittdroid View Post
    Everyone would get upset about a program designed to help kids.
    I wouldn't, if the program actually helped the children and didn't hand out free money. Instead of these type plans, the government would better serve the kids by teaching them personal finance in high school so they actually learn something and are better prepared for life after school and more likely to stay off the welfare programs.

    Right now, the only such classes I know of are put on by Dave Ramsey, with most being funded by local sponsors. I'm sure it's better than anything the government could put together to boot.
  23. #23  

    Default Re: KidSave act

    Quote Originally Posted by Mooncatt View Post
    I wouldn't, if the program actually helped the children and didn't hand out free money. Instead of these type plans, the government would better serve the kids by teaching them personal finance in high school so they actually learn something and are better prepared for life after school and more likely to stay off the welfare programs.

    Right now, the only such classes I know of are put on by Dave Ramsey, with most being funded by local sponsors. I'm sure it's better than anything the government could put together to boot.
    The current government is more concerned with birth control and the defense budget. Education hasn't been a priority in years.
  24. Thread Author  Thread Author    #24  

    Default Re: KidSave act

    Quote Originally Posted by nolittdroid View Post
    The current government is more concerned with birth control and the defense budget. Education hasn't been a priority in years.
    I'm no fan of the government schools either.

    I was also thinking more on what you said earlier about programs designed to help kids. I don't think this would even fall into that debate because it isn't attempting to help them when they are a kid. The money is held until retirement, so there's nothing there to help them as they grow and give them a hand up or handout.
  25. #25  

    Default Re: KidSave act

    Another thing to take into account is those people without a high school degree only have a life expectancy of around 72 years which means this does little to help them the people who graduate college have till around 80 to benefit. I dont see how this would affect inequality if it is locked till 65, its way to late at that point
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