The random political thoughts thread (Part Deux)

[Moonliner]

Originally Posted by scaeagles

In thinking about this whole Hillary 5000 per baby thing, it really, really angers me. The reason? It costs nothing during her Presidency.

I admit I am no expert in the bond market or how they work, so it is possible I'm missing something.

Issuing a 5000 bond costs nothing. When it matures and comes due 18 years later when she is long gone, each of those bonds will probably be worth something like 12000 (that assumes a rate of around 5% compounding annually). I find it morally repugnant to promose a new entitlement program that will have no impact in terms of cost or the books (again, figuring it will be kept off the books like social security is) during her administration (should she be elected).

I don't think that's right. Someone has to purchase the original bond. Typically it's the individual who pays the base price of the bond. Under the Hillary plan the initial $5,000 still has to be paid, it's just the cash is coming from the Government not you (Which of course really means from you.)

It's Nanny government at it's best. Now the all caring Government will watch after you directly from birth all the way through retirement. How sweet.


Oh and don't forget to translate the propsal from Hillary speak...

"I like the idea" = "I'm just saying I like it, I'm not promising anything"

"A $5,000 bond" = "Of course I'm not saying where the $5,000 would come from, perhaps the babies parents?"

[scaeagles]

Originally Posted by Moonliner

I don't think that's right. Someone has to purchase the original bond. Typically it's the individual who pays the base price of the bond. Under the Hillary plan the initial $5,000 still has to be paid, it's just the cash is coming from the Government not you (Which of course really means from you.)

Makes sense, but if the government issues a government bond to someone, do they have to put up the 5000 upfront into some account, or is it just a promissary note to give out the money to the bearer once it matures?

[Moonliner]

Originally Posted by scaeagles

Makes sense, but if the government issues a government bond to someone, do they have to put up the 5000 upfront into some account, or is it just a promissary note to give out the money to the bearer once it matures?

If you are talking normal Government bonds you purchase them and are guaranteed a specific rate when they mature. You get the security of a safe investment and the Gov get's the cash now. (Note with 'I' type bonds that rate is adjusted for inflation over the life of the bond)

If you are talking Hillary's then it appears you purchase them with hot air.