There's No Free Lunch



November 20, 2007

All that glitters is not gold.  The last free lunch was the five loaves and two fishes.  Beware unintended consequences.  Ok, ok: enough clichés.  They are all somewhat relevant however, at least in my mind, to State Treasurer Tate Reeves' proposal—based on the semi-socialist system in effect in Great Britain—to give every child born in the state of Mississippi, beginning next year, a $500 savings account.  That would be just the beginning.  More free money could be obtained in subsequent years based on the family's income level.  Hillary Clinton has proposed a similar measure of $5,000 for every child born in the United States.

It would cost, according to Reeves' estimate, $100 million to implement his plan in Mississippi.  He thinks he can get some of that funded by the private sector—perhaps as much as a quarter.  Frankly, I think that is overly optimistic.  Even so, that still leaves $75 million for the taxpayers to cough up in a state where we have trouble finding money every year to budget for the state's basic needs already.  Look at the struggle every year to fully fund education as just one example.

Under the plan as presented, once the recipient of this money reached 18, at least as I understand it, they would not be obligated to use their free money to pay for an education.  While I have no particular problem with the current state sponsored college savings plan, in general I think the government is a poor choice for managing your money.  Look at Social Security, or the money from liquor tax that was to go toward education but went into the general fund instead.  Additionally,  I'm not keen on the idea of my tax dollars, and yours, going to some 18-year-old who hasn't done a thing to earn them and then getting to decide how they are going to spend this windfall.

Hopefully, the legislature and the governor will look at this well-meaning, but fraught with peril, idea long and hard before passing it.  It would be wonderful if we lived in a world where we could just end poverty by giving everyone money.  I think most would agree that governmental attempts to do just that have generally not worked out well in the long term for anyone.  It also runs contrary to the American ideal of people taking responsibility for their own success instead of looking to Big Brother for their needs.  Charity is perhaps the greatest virtue of all.  Misguided and forced redistribution sets off a world of unintended consequences that we can ill afford.

I'm Jim Cameron. Let us know what you think.