Hillary Clinton has proposed the concept of “baby bonds”, $5,000.00 given to every child at birth for later use in life

Clinton, her party’s front-runner in the 2008 race, made the suggestion during a forum hosted by the Congressional Black Caucus.

“I like the idea of giving every baby born in America a $5,000 account that will grow over time, so that when that young person turns 18 if they have finished high school they will be able to access it to go to college or maybe they will be able to make that downpayment on their first home,” she said.

The New York senator did not offer any estimate of the total cost of such a program or how she would pay for it. Approximately 4 million babies are born each year in the United States.

Well, with a middle school education, once can estimate the current cost (4 million x $5,000.00 = $20 billion annually). For purposes of a round number, and also likely being the highest interest rate possible, let’s assume a 5% return , which when compounded over 18 years roughly doubles the $5,000.00 bond. This doesn’t even cover today’s cost of tuition and fees. Last year, the average cost of attending a public four year school was $12,108.00. To attend a private four year school was significantly higher to the student, at an average of $27,317.00* per year.

In short, Hillary’s proposal will not even cover one year of educational expenses 18 years from now, would add to the deficit annually, and over eighteen years (not counting interest), $360 billion to the national debt. Further, in 18 years both public and private institutions will know there is a federal government windfall coming, which will be largely absorbed in increased fees and tuition over that period. ** As for a down payment on a home, this just sounds like an expanded HUD program to me.

So she is selling a bill of goods to the congressional black caucus, who will go back and tell their constituents they will be getting $5,000.00 for every kid born a Hillary-baby.

Such wretched pandering is not unusual. Seldom though is it combined with such bad economics. Now we have a new equation.

Bad Economics + Racial Pandering = Democrat 2008 Frontrunner

I would graph it, but I think I would get sick.

* the difference in cost is illusory. As of 2001, the last year statistics were readily available, the average institutional public school cost was actually $30,625 per year per student, which is lower than the average institutional cost of a private school education but more in line with current private school tuition, fees and board. In short, whether it’s public or private, someone is paying for it.

** for instance, say you run a fruit stand, and know that everyone has just been given an additional $10.00 to spend on fruit. You know they will have to spend it, but you also know you don’t have any more fruit than you had before. Naturally, prices will go up to capture the additional funds and keep the supply and demand curves in balance. More simply, increasing the money supply while keeping supply constant results in inflation. Education is no different than anything else.