The Seattle Times clues us to a creative new piece of social engineering:

Paul O'Neill, President Bush's first treasury secretary and a former chief executive officer of aluminum giant Alcoa, proposes having the government stake every American baby at birth to an investment savings account. […]

• Upon each child's birth, the government opens an investment savings account in his or her name and puts $2,000 into it. The government puts another $2,000 into the account every year until the child turns 18. The money then would be left to grow at a compounded rate until the individual reaches the retirement age of 65.

• Assuming a 6 percent continuously compounding rate of return over 65 years, money in the account would exceed $1 million. The money would be put into a 20-year annuity paying about $82,000 a year.

• Assuming 4 million births annually, O'Neill estimates it would cost about $144 billion to fund accounts for each year's babies for 18 years.

I like the idea of tax-free retirement savings accounts, and I like the idea of replacing the current system of using payroll taxes to make transfer payments to retirees. I have only two small amendments to offer to O’Neill’s plan. Instead of having strangers fund the account through taxes, let’s have the child’s parents (or other relatives or friends) fund it. And let’s let them choose the amount they put in.