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Paying for Investments in Children

Paying for Investments in Children. Isabel Sawhill October 21, 2008. Trends in Federal Spending on Children. Total real spending increased 1.4% 2004-2008. Compares to 12.2% for all spending Discretionary spending declined by 6.7% Entitlement spending increased by 5.7%

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Paying for Investments in Children

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  1. Paying for Investments in Children Isabel Sawhill October 21, 2008

  2. Trends in Federal Spending on Children • Total real spending increased 1.4% 2004-2008. Compares to 12.2% for all spending • Discretionary spending declined by 6.7% • Entitlement spending increased by 5.7% • “The 45-year trend of declining investments in children as a share of the federal budget has continued unabated during the past five years.” First Focus, 2008, p. 6,Children’s Budget 2008

  3. Spending on the Elderly will Crowd Out Spending on Children

  4. Advocates for Children Must: • Avoid wishful thinking • Re taxes • Re a war dividend • Re health care savings • Forge a bipartisan compromise • Invest new resources in children linked with… • Reform of entitlements

  5. Why This Makes Sense • Elderly better off than in the past • Younger families struggling • The miracle of compound interest • We can protecting vulnerable groups • Reframe debate around life cycle view

  6. Select Comparative Statistics for the Elderly and Non-Elderly

  7. Source: Isabel V. Sawhilll, “Paying for Investments in Children,” in Big Ideas for Children: Investing in Our Nation’s Future, ed. First Focus (Washington, D.C.: First Focus, 2008).

  8. Baby Boomers Are Affluent

  9. The Miracle of Compound Interest Source: http://www.moneychimp.com/calculator/compound_interest_calculator.htm See Appendix A, Chart 3.

  10. High Priority Investments and How to Pay for Them

  11. Conclusion • Must make cost-effective investments • Must protect the vulnerable elderly and phase in any reform gradually But ….. • A nation that gives priority to its elderly over its children doesn’t have much of a future.

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