This is the Cato Daily Podcast for Monday, October 8th, 2007. I'm Caleb Brown.

U.S. Senator and presidential candidate Hillary Rodham Clinton wants to give every baby born in the U.S. $5,000, a down payment on education or retirement down the road.

That idea sets off more than a few alarm bells for Chris Edwards,

the Cato Institute's Director of Tax Policy Studies, the top-down program

creates a new political football that he says every politician will want to kick around.

Senator Clinton came out in a speech recently with an idea to give every baby born in America a $5,000 savings account that will grow over time.

So the government would, for all 4 million babies born in America each year simply set up an

account for them dump five thousand dollars into it and then the kids

supposedly the money would grow over time and then young adults will be able to take the money

out to go to college to put a down payment on a home or to go into business or any other

number of reasons that Congress thought would be a good idea

for them to use this money.

Now that raises obviously a lot of problems.

The first one that comes to my mind is if

five thousand dollars is good wouldn't ten thousand dollars be better?

Of course this is one of the big dangers here that this would continue to be

expanded over time. The initial cost would be $20 billion a year and that would obviously rise over time.

I mean, there's the cookie jar problem that new purposes would be proposed for this money. Families would have these

accounts and they would lobby the government to say, well can the money be used for a baby formula? Can it be used for children's clothes? Can it be

used for private school? And on and on and on. And so there'd be no end of lobbying going on in Congress

over this money. What are some of the other problems with their plan?

Well, there's the big cost problem.

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