Plonk for Posterity
How Much Should the Government Spend on Birth Rates
Based on a meta-analysis that a 10% household income benefit raises birthrates .5% to 4%, a commenter argues that child subsidies are absurd because the government would have to spend $450k per child to get the birth rates back to replacement.
$450k! Absurd!
After all, that is almost $25k/year to raise a child. When you consider that most estimates put the cost of raising the kid at around $300k, that is a princely plutocratic $9k a year.
Preposterous. Absurd. Splutter splutter.
Marko Jukic says that’s a great deal.
If a tech CEO revealed he could manufacture self-replicating fully autonomous universally adaptable humaniform AGIs that stayed in good working condition for ~60 years for $450k each, he would be hailed as a hero and the U.S. government would order $10 trillion worth of them
At $450k per child, we could double the U.S. birth rate and reach well above replacement fertility for the price of just $1.6 trillion. That is just 23% of annual federal spending and less than Social Security + Medicare. It's literally a steal.
Note the $450k figure is apparently for Taiwan. The US equivalent, assuming the birth rate is about 1.5 TFR and assuming an average household income of around $80k, would be $64k at the low end and $512k at the high end. $450k is close enough.
Demographer Lyman Stone, who did the meta-analysis in the first place, then came back into the discussion.
He said his results actually suggest anywhere from 9% to 22% of GDP for Taiwan. (For comparison, 9% GDP is about what the US spends on old people via Medicare and Social Security). Even more to the point, Stone points out that the high-end figures assume that its money alone that achieves the result. But in reality, he says
successful pronatalism will involve dozens of different policy changes each of which will nudge fertility a bit. Taiwan could get to replacement fertility for a lot less than 20% of GDP by doing more modest financial incentives plus a bunch of other stuff including various cultural interventions.
Sums well south of $450k would drastically raise the status of parenting, in turn boosting the birth rates.
We’ve Been Beating This Drum For Awhile
These figures are roughly in line with our own analysis, which suggests by comparison with spending on other crises and other programs that $200k to $1 million per child would be reasonable.
But What About the Welfare Queens
One common objection to child subsidies is that it will lead to welfare queens popping out welfare babies, which we are told by many was a common concern in the 1980s.
Assuming that’s true, there are a few tweaks that can minimize the issue.
The simplest is to make the payments yearly and limit them to married parents.
Another way is to use the money as a prize for excellence.
$1 million tax-free to every family with four children where the parents are married, never divorced, all the children legitimate, and both parents are either biological or adoptive parents and have full legal custody
2 million more when you hit six
Or do a lottery:
One entry for every dollar earned multiplied by the number of dependents (for married parents who file jointly, both get an entry), with an income equivalent for domestic work. Winners aren't eligible for another five years. Winners get $1 million and the drawing goes on until the appropriation for that year is exhausted. The 5-year wait is waived if all eligible lottery winners have won and there's still cash left.
This could be expanded. Allow an entry for each day of military service since the last time the entrant won, an entry for every teacher of a student who tests at X or above on some g-loaded standardized test, and so on.
All that’s missing is the will and lots of cash.
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