Kids Accounts

Forget Easy Money

Articles — Sun, 07 Oct 2007 07:12:00 -0400

Countrywide Financial, the nation’s largest mortgage lender, has a curious new idea -- or, more precisely, an old one. No longer will it use wads of Chinese cash recycled through Wall Street to make subprime loans to unqualified borrowers. Instead, it will take in deposits from small savers and lend them out to people who might actually repay them -- just like that humble thrift institution president George Bailey did in It’s a Wonderful Life.

Imagine: a bank that promotes thrift! This could be the start of something big. Writing recently in the American Banker, Eugene Ludwig, a former comptroller of… more

Ray Boshara and the ASPIRE Act in the Los Angeles Times

Communications — Sun, 07 Oct 2007 03:08:00 -0400

New America in the News:

In 2004, Sens. Rick Santorum (R-Pa.) and Jon Corzine (D-N.J.) proposed the America Saving for Personal Investment, Retirement and Education (ASPIRE) Act, legislation that would have given every baby a minimum $500 endowment, untouchable for 18 years, at which time it could be used to help pay for college, put a down payment on a house or start a business....

The notion of a baby bond is grounded, according to supporters, in the concept of the American ownership society, which was a tenet of President Bush's 2004 campaign (when the practical application was privatizing Social Security).

"The intellectual history of this idea is property ownership -- the Homestead Act, the GI Bill -- conscious efforts to spread property ownership through the population," said Ray Boshara, director of the Asset Building Program at the nonpartisan New America Foundation, which helped craft the ASPIRE legislation and advised British officials on their program. "That has broad bipartisan support."

The idea, he said, is to put children on a path toward lifetime savings and wealth accumulation, a notion that appeals to conservatives and liberals.

On Wednesday, in fact, the ASPIRE legislation was quietly reintroduced in the House of Representatives by a bipartisan coalition. Boshara said the reaction to Clinton's remarks --especially Giuliani's -- made some Republican supporters nervous.

"Even if Rudy Giuliani thinks it's a good idea, he's not going to say that," said Boshara. "This is a campaign, and this was an easy target. I suspect that $500 would not have received quite the denunciation that $5,000 did."

Slightly more than 4 million babies are born in this country every year. Money in a baby bond plan would be invested and augmented by matching funds. Financial education would be part of the program. The goal would be to have around $20,000 available to each young adult when he or she turns 18.

"If you have assets as a kid, it changes your mind-set and your orientation, and conservatives love that part of the idea," said Boshara. "For Democrats, it's more about opportunity. When everyone was talking about Social Security and savings and retirement security, this was the only idea that brought Democrats and Republicans together..."

For the complete article, please visit the Los Angeles Times website.

Bipartisan Lawmakers Introduce 'KIDS Account' Bill to Build Savings, Financial Education, and Retirement Security

Communications — Fri, 05 Oct 2007 05:28:00 -0400

A bipartisan coalition introduced the America Saving for Personal Investment, Retirement, and Education Act (“The ASPIRE Act”) which would set up a “KIDS Account” at birth for every child in America which they can later use to pursue post-secondary education, buy their first home, or build up a nest-egg for retirement. The ASPIRE Act, which primarily benefits low-income kids, is based on research provided by the New America Foundation’s Asset Building Program. Representatives Patrick Kennedy (D-RI), Phil English (R-PA), Jim Cooper (D-TN), Rahm Emanuel (D-IL), and Tom Petri (R-WI) introduced the ASPIRE Act in the House on Wednesday.… more

Restoring the Value of Saving

Articles — Tue, 04 Sep 2007 08:09:00 -0400

The value of saving is finally making a comeback. After years of over consumption and accelerating debt -- and more than two years with a negative personal savings rate -- Americans are finally beginning to fret over their empty coffers and negative balance sheets. As headlines profile subprime borrowers going into default around the country, the average American’s sense of economic security has jumped from unease to panic. As policymakers scramble to develop new policies to bolster working families, echoes calling for the return of the American value of thrift are beginning to grow louder.

Any middle class American will tell… more

On Taxpayer-Funded Savings Accounts

Articles — Mon, 12 Mar 2007 00:32:00 -0400

Even though California is being modeled as the birthplace of post partisanship, ideological divisions still run deep in the political process. Two state senators who just crossed the aisle to forward a creative solution to a pressing state problem are getting more grief than glory.

Sens. Darrell Steinberg, D-Sacramento, and Robert Dutton, R-Rancho Cucamonga, held a press conference two weeks ago to introduce their bill to create a California KIDS Account for every newborn. The goal is to encourage parents to start saving early for their children’s future and, in the process, build the whole family’s financial literacy. This bill… more