In the May/June issue of the Washington Monthly, American Interest‘s Adam Garfinkle took two very big and very good ideas and combined them into an even bigger, even better idea.
The first idea is “baby bonds:”
When an American citizen is born, the U.S. government should create, along with a Social Security number, a savings account for that child into which between $5,000 and $7,500 is placed—called a baby bond or, as some prefer to call it, a service bond. That child’s parents, family, and friends may contribute to that fund until the child becomes eighteen, and those contributions are treated like charitable deductions for tax purposes (assuming the continuation of the current tax structure), and can be subtracted from taxable income. Through the miracle of compound interest, every child will have a considerable nest egg upon reaching the age of consent—upward of $20,000 to $30,000.
The baby bond or service bond idea has been operating in this way in Great Britain on a modest scale since 2003; even if we just copied that model, it would be a way to get equity spread around to more young people who can put it to productive use.
But then here’s Garfinkel’s twist: combining “baby bonds” with voluntary national service:
[T]o access the accumulated money, every citizen would have to perform national service in one of eight categories: the military, the Peace Corps, Educore (an organization like Teach for America), forestry and environmental remediation, urban “broken windows” brigades, hospice and elderly care, hospital ship duty, and a Habitat for Humanity-style program. (Military service should be made to attract only a small percentage of baby bonders, because the last thing our generals want or need is a huge number of untrained short-timers to put up with. We need to be clear that the baby bond/national service concept is not a smokescreen for a new military draft.)
The first twelve- or eighteen-month stint of service, complete with training, would have to be fulfilled between the ages of eighteen and twenty-five, and would entitle a person to three-fourths of his or her bond. Another nine- or twelve-month stint, performed at any time (including after age sixty-five, or the official retirement age), would entitle the person to the rest. The funds would simply stay in the same account earning interest until the owner chose to withdraw them. We would be crazy—we are crazy—not to encourage and incentivize our older citizens to share their experience with others.
There are more details, and a lot of discussion from Garfinkel about what this kind of rewarded service might accomplish. I encourage you to read it all. But for now, just let it sink in that there are myriad ways to develop innovative policy ideas that would combine major human capital investments of the sort progressives have always supported, with the values of common purpose and patriotism that conservatives have all but abandoned outside the realm of military service.