Steve Lunetta: Child savings accounts the real answer?


I would like to think that the people we elect as public officials are fairly intelligent folks. We may sometimes disagree with their political views, but it is rare when a public official lacks common sense.

However, I think I found one.

Los Angeles City Councilman David Ryu has proposed a curious program. In a report under consideration by L.A., he would like to set up savings accounts for every kindergarten child within the LAUSD area and stick $50 into the accounts as seed money.

In a Daily News story from Monday, “Research shows that child savings accounts can help expand educational and economic opportunities for low- to moderate-income families.” The report goes on to say the accounts would increase the likelihood of college attendance for the students.

With 55,000 kindergarteners district-wide, that is about $2.8 million. Add the costs of setting up the accounts and maintaining the program, we are looking at about $3.4 million annually.

Ryu goes on to say, “Everywhere I go, every time I mention this, everyone is interested in this. … Everyone I talk to wants to partner on it.”

Let me guess. I’ll bet BofA and Chase are stumbling over each other to get their hands on this cash.

Let’s think a little bit more about this. Is the fact that a child has a savings account the major life influence turning a youngster from a life of crime and sets him or her on the path to becoming a neurosurgeon? Is it really that simple?

Or could it be something else?

Maybe the parent or grandparent who cares enough for the child to create a bank account is a much stronger influencing factor than the account itself.

If Mom and Dad are capable of planning ahead and having a vision of the future, maybe the parents will be more disposed to unplug the PlayStation and make Junior get that math homework done. Study after study has shown that an involved and active parent is a much better indicator for success than anything else.

But once again, we have a politician selling an idea that has no basis in common sense. Mr. Ryu would be well-served to learn the old adage “correlation is not causation.”

Let’s explore that idea a bit further. Just because something happens at the same time as something else does not mean the two incidents are connected.

For example, I started listening to a new podcast last week. Today, I ran out of gas and got stranded on Lyons Avenue. I could easily conclude that the podcast made me run out of gas. Therefore, I should stop listening to the podcast.

Now, it could very well be true that the podcast distracted me from paying attention to the gas gauge and was the “cause” of me running out of gas. Or, more likely, it could have been a host of other reasons from “I was short on cash this week to buy gas” to “I simply forgot.”

Correlation is not causation.

It’s the same error that the climate change criers make: the planet is warming, humans have been industrializing, therefore humans are the sole cause of climate change through industrialization.

They conveniently ignore the fact that the planet was warming long before humans began putting CO2 into the air and that CO2 levels have been much higher in the past than they are today.

There could be a bevy of reasons for climate change that have little to do with humans. Or maybe humans play a part but are minor in comparison to the macro natural processes that we are still struggling to comprehend.

Again, correlation is not causation.

But, to politicians like Ryu, it’s easy to look for a Band-Aid to slap on a simplistic view of a problem. Which is easier to do? Give kids savings accounts or find ways for parents to be more involved in their child’s education? Yep, you guessed it.

And, let’s not forget that banks would love to have all those new potential life-long depositors show up at their doors. Never mind that the savings accounts pay somewhere around 0.000001 percent interest and that 50 bucks will be worth maybe $50.17 when the kids are 17.

With all the problems LAUSD and Los Angeles have right now, I don’t think kindergarten savings accounts should be high on the list.

Steve Lunetta is a resident of Santa Clarita and didn’t have a savings account until the second grade. That’s why he grew up to be a dangerous Reaganite. He can be reached at [email protected].

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