A smart friend emailed me a while ago:
Here’s how we can turn this to our advantage:
Make it $50,000 instead of $5,000 and let these kids use it (and accumulated returns) to pay payroll taxes and income taxes when they grow up and start working. That way only those who are productive will get the benefit. Think of it like a “deductible” on taxes.
With about 4.3 million US births per year the “cost” would be $215 billion but let’s limit it to children of US citizens and what if we make the accounts “notional” so money would be outlayed until later. It could be like a tax cut given today to workers of future generations with no immediate net cost to the government.