Bill Ackman, chairman of Pershing Square Capital Management, told investors in a recent note that in order to preserve capitalism, steps need to be taken to close the increasing inequality gap.
Ackman has a plan. It involves taking some of your money.
Under Ackman’s plan, each child born in the U.S. would receive $6,750 in a government-funded basket of index funds that could only be tapped at retirement. Assuming 8% returns over 65 years from birth to retirement, that total would ultimately exceed $1 million, and it would cost the government about $26 billion a year, if the birthrate holds, according to Ackman.
There are many problems with this, first, he is thinking like a socialist.
I discussed this “inequality gap” confusion in a 2019 video “What Socialists Don’t Get About Capitalism and Inequality” (21 minutes and 50 seconds):
But more to the point, it doesn’t “cost the government.” The government has no funds of its own. It is the ultimate coercive taker. Ackman’s plan would cost current private sector earners, it is the only way. Thus, it is providing less income for current workers while lowering incentive for future workers (and non-workers) to save–since they will have savings built up by government coercion of earlier workers.
This is wacky. It has nothing to do with “saving” capitalism. It is putting capitalism through a mad loop taking from present citizens and giving money to babies. And significantly, creating youth with even more high time preference. Why should they care about their long-term future when a million dollars will be handed to them?
But, hey, maybe Ackman has a point. Perhaps he should show us how it is done.
According to Forbes, he is worth $1.9 billion. He should keep a million dollars for himself and pass the rest of his net worth out in $6,750 chunks to the babies of urban primitives as they are born. He could accomplish this in roughly a year.
So are you serious Ack or just another central planning poser? Or does this just work with other people’s money who are worth far, far less than $1.9 billion?
And what the hell does any of this have to do with “saving” capitalism when you create the idea that government handouts are the answer? Sounds to me like you are attempting to save central planning despite its many failures.