Market Correction

12 October 2007

Editor, Washington Post
1150 15th St., NW
Washington, DC 20071

Dear Editor:

Michael Gerson supports Hillary Clinton's plan to have Uncle Sam subsidize savings accounts for poor children ("The Economic Elephant At the GOP Debate," October 12). Playing the more-pragmatic-than-thou card, Gerson notes that "Assets cause people to plan for the future."

Indeed so. But nearly every American born today - including those born to poor parents - already at birth possesses a fabulously valuable asset: an opportunity to work and earn income in an immensely productive economy. Even excluding fringe benefits, the ordinary production-line worker in America today earns an annual salary of about $31,000. Someone who works fifty years earning this salary will earn a lifetime income of $1,550,000. At birth, the discounted value, at today's interest rates, of this opportunity is about $246,915. It is, of course, an asset that must be nurtured - an asset that will pay off only if those who hold it plan for the future.

Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University