How Stupid Spreads

I finished up the Haldane book last night. One of the concluding bits was his view that humanity was on the decline. By any reasonable measure, humanity is doing better than ever. The health of a species is measured in its numbers, its fertility and its longevity. Humans are more numerous than ever, live longer than ever and fertility is holding up in most places. That last bit is the canary in the coal mine. We seem to be heading toward a great die out in a generation or two. Still, things look pretty good.

On the other hand, you can make the case that the stupid fraction is finally beginning to swamp the smart fraction. Proof is right here in this article.

It is called KidSave, and it was devised in the 1990s by then-Sen. Bob Kerrey of Nebraska, with then-Sen. Joe Lieberman as cosponsor. The first iteration of KidSave, in simple terms, was this: Each year, for every one of the 4 million newborns in America, the federal government would put $1,000 in a designated savings account. The payment would be financed by using 1 percent of annual payroll-tax revenues. Then, for the first five years of a child’s life, the $500 child tax credit would be added to that account, with a subsidy for poor people who pay no income. The accounts would be administered the same way as the federal employees’ Thrift Savings Plan, with three options—low-, medium-, and high-risk—using broad-based stock and bond funds. Under the initial KidSave proposal, the funds could not be withdrawn until age 65, when, through the miracle of compound interest, they would represent a hefty nest egg. At 5 percent annual growth, an individual would have almost $700,000.

Basic math says the final number is off by 90%. The initial investment of $3500 earning 5% over 60 years is $65,377.15, not $700,000.00. This is math they used to teach in grammar school, but perhaps that is no longer true. The author cannot claim a typo as he goes on and on about how wonderful it is to give people this huge pile of cash. The author, Norm Ornstein, has the following bio:

He spent 30 years as an election-eve analyst for CBS News, until he moved to be the on-air analyst for BBC News in 2012. For two decades, prior to joining National Journal, he wrote a weekly column called “Congress Inside Out” for Roll Call. He has written for The New York Times, The Washington Post, Wall Street Journal, Foreign Affairs, and other major publications, and regularly appears on television programs like The NewsHour with Jim Lehrer, Nightline, and Charlie Rose. At the 30th Anniversary party for The NewsHour, he was recognized as the most frequent guest over the thirty years.

Norm Ornstein is probably a great guy, a pillar of his community, but he is not very good at math apparently. He has no credentials in economics or finance. Sadly, he is unfamiliar with basic mathematical concepts like compound interest calculations. Many people are bad at math and struggle with basic concepts of economics and finance. I would assume one of them is his editor. They have no business speaking publicly about these subjects, but here he is doing just that.

The communications revolution has made it so the stupid can reach a wide audience. TV is full of dimwits reading from a teleprompter things they can never under stand. Much of that is written by people who are just as dimwitted, but less telegenic. When most of the nation is getting their information from the left side of the bell curve, the results will eventually reflect that fact.

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Anon
Anon
6 years ago

Lol – bad math. I thought you were going to write about the fact that the lower classes have more children per woman than the upper/smarter classes and how we are heading to a future of dummies like in the movie Idiocracy. But bad math is cool.