I cant see wealthy families investing money for their kids in a scheme that invests in ETF's that track the index etc and produces modest returns inline with what the S&P500 returns each year...
Economists don't seem too impressed with Taco Accounts.
Despite its limited life - children born in the next three years - the US economy simply doesn't have the capacity to fund the direct fiscal cost of over $3 billion per year and the money will most likely have to be borrowed. While these payments are a direct cost to the US government, they are a benefit to the lenders through interest. In other words, the payments and receipts cancel each other out.
However, the $1,000 grant is just a redistribution from taxpayers and lenders to newborns, and is neutral in terms of efficiency. The opportunity costs are not neutral though; when the US government borrows, it issues bonds. The investors who buy those bonds aren't investing that money in other, more critical areas of the economy like infrastructure, health, education, housing, energy, etc.
The affordability crisis means that the vast majority of American families won't be able to make contributions. Most beneficiaries will receive $1,000 plus 18 years of compound interest and the administration reckons that will be worth $15,000. The administration calculates that children from families that can afford to invest the maximum will have $742,000. In other words, "It will make wealth inequality significantly worse, because it favors those who have resources to begin with,” according to David Radcliffe, from The New School’s Institute on Race, Power, and Political Economy.
William Darity, an economist at Duke University, says "Allowing those who are richer to put more in than those who are poor runs counter to any notion that there's any kind of redistributive justice taking place.” And this is an economy where the bottom 50% of American households hold just 2.5% of the wealth.
Economists don't seem too impressed with Taco Accounts.
Despite its limited life - children born in the next three years - the US economy simply doesn't have the capacity to fund the direct fiscal cost of over $3 billion per year and the money will most likely have to be borrowed. While these payments are a direct cost to the US government, they are a benefit to the lenders through interest. In other words, the payments and receipts cancel each other out.
However, the $1,000 grant is just a redistribution from taxpayers and lenders to newborns, and is neutral in terms of efficiency. The opportunity costs are not neutral though; when the US government borrows, it issues bonds. The investors who buy those bonds aren't investing that money in other, more critical areas of the economy like infrastructure, health, education, housing, energy, etc.
The affordability crisis means that the vast majority of American families won't be able to make contributions. Most beneficiaries will receive $1,000 plus 18 years of compound interest and the administration reckons that will be worth $15,000. The administration calculates that children from families that can afford to invest the maximum will have $742,000. In other words, "It will make wealth inequality significantly worse, because it favors those who have resources to begin with,” according to David Radcliffe, from The New School’s Institute on Race, Power, and Political Economy.
William Darity, an economist at Duke University, says "Allowing those who are richer to put more in than those who are poor runs counter to any notion that there's any kind of redistributive justice taking place.” And this is an economy where the bottom 50% of American households hold just 2.5% of the wealth.
Yep.
The only US politician I listen to in reference to how the working class is doing in the US is Bernie. Too many working class/lower class/middle class Yanks don't seem to realise how they're being fkd over -- in so many ways -- by the decaying Orange One and his army of sycophants. Republican Party is dead. And let's not talk about the disarray Democrats.
Some random data for those interested :
from 1979-2019, real wages for US workers rose by 17%
from 1979-2019, worker productivity rose by 72%
from 1980-2018, the share of their total spending spent on health doubled.
In 2008, there were 7 states in which the cost of covering your health insurance was 10% or more of the median income. By 2018, that rose to 42 states.
from 1980-2018, the cost of education rose 600% compared to people's incomes. Not a typo.
Bipartisan polices that have cut the US population into 6000 pieces and left it profusely bleeding will not be ameliorated by a band aid.
There's probably a bit of interest to be collected.
