The American Interest
The Middle East & Beyond
Published on February 7, 2013
What’s Wrong and How to Fix It, Part 11: National Service

We must enact a national service/baby bond program for America.

There is a crisis of civic participation in America, one that marches in step with the erosion in social trust over the past several decades. Notwithstanding the Tea Party (not really an extra-parliamentary phenomenon anyway) and Occupy Wall Street movements, we’ve become increasingly a nation of mostly (and increasingly cynical) spectators, not participants, in our own governance. No democracy can be healthy with the levels of mistrust and alienation that exist today in America (although I candidly admit that it is possible to overdo democratic participation, as California’s catastrophic referendum politics illustrates).1 We need therefore to recreate a culture of national service that will have long-lasting benefits for civic participation, that will frontload some equity for those younger Americans who don’t really experience equality of opportunity, and that, above all, will refurbish our country’s depleted stock of social capital. Once we get the plague of plutocracy under control, here’s how we can do it.2

When an American citizen is born, the U.S. government should create, along with a social security number, a savings account for that child into which $5,000 and $7,500 is placed—called a Baby Bond or, as some prefer to call it, a “Service Bond.” That child’s parents, family and friends may contribute to that fund until the child becomes 18 years of age, and those contributions are treated for tax purposes (assuming the continuation of the current tax structure) like charitable deductions: money put aside that can be subtracted from taxable income. Through the miracle of compound interest, every child will have a considerable nest egg upon reaching the age of consent—upwards of $20,000-30,000.

Even if the Baby Bond or Service Bond idea, which has been operating in Great Britain on a modest scale since 2003, stopped there, it would be useful as a way to get equity spread around to more young people who can put it to productive use. But in my plan, it doesn’t and mustn’t stop there: To get that money, every citizen would have to perform national service in one of eight categories: military; Peace Corps; Educore (like Teach for America); forestry and environmental remediation; urban “broken windows” brigades; hospice and elderly care; hospital ship duty3; and a “habitat for humanity”-style program. (Military service should be made to attract only a small percentage of Baby Bonders, because the last thing our generals want or need is a huge number of untrained short-timers to put up with. This idea, therefore, is definitely not a smokescreen for a new military draft.)

One 12- or 18-month stint of service, complete with training, would have to be done between ages 18 and 25, and that first stint would entitle a person to three-fourths of his or her Bond. Another 9-12 month stint at any time, including after age 65 or whatever retirement age comes to be, entitles the person to the rest (it stays in the same account earning interest until its owner chooses to collect it). We’d be crazy (we are crazy) not to encourage and incentivize our older citizens to share their experience with others.

Our 18-25 year olds can use the money to pay for college or vocational training, to put a down payment on a home or to start a business. This is the way to create a real shareholder mass democracy. And think of the touch skills they will learn in their service; that alone might in the long run be worth the price of the program.

Everyone seems to understand the rationale for Social Security: We hold ourselves as a society morally responsible for providing a basic minimum for our elderly out of respect for their humanity and an abiding sense of basic fairness toward them. If we care about our elderly enough to pool social resources on their behalf, why don’t we take a similar attitude toward our young people—young people who not only deserve a fair start, but whose accomplishments in the constructive lives ahead of them will benefit us all? The Baby Bond idea is not charity or welfare; it is socially selfish, for it benefits everyone.

Because it will benefit everyone, businesses and state and local government will have good reason to offer partial or full matching funds to encourage Baby Bonders to spend their money at colleges or in areas they wish to encourage. So, for example, if the City of Pittsburgh, say, wanted in-state Pennsylvania Baby Bonders to invest in real estate or businesses in certain parts of the city, the municipal government could offer special incentives to attract Baby Bond resources. If General Electric wanted to encourage more students to go into electrical engineering, it could offer to match any Baby Bonder funds used to pay toward an academic major in that field. The possibilities, if not literally endless, are extensive.

In my version of the Baby Bond-National Service concept, the first 12-18 month stint of service, in whichever of the eight categories is chosen, must be done away from a person’s home area. The government will provide enough of a stipend for basic subsistence housing and board (financed in part out of the interest-earning money it holds in maturing Baby Bond accounts), just as “City Year” and AmeriCorps programs do now.

A key reason for “circulating” our 18-25-year olds is to break the downward spiral of poverty, drug addiction and hopelessness that afflicts a still far too large percentage of inner-city residents, and a significant number of rural “white” poor, as well. The only way to really solve this problem is to literally remove young people away from harmful environments and have them come face to face with people of their own age from different places. Moreover, the only way to generate real understanding for people in such straits from the rest of our population is to have them actually meet and get to know one another in a neutral environment. The military draft used to help fulfill this function in the past; American society needs that function again to drive up our reserves of social trust, now by dint of another method.

This proposal amounts to integrating the many private volunteer and public service programs already in existence, and perhaps adding a few more. It amounts really to scaling up dramatically and incentivizing in a new way what we already do as a society in a fragmented and inadequate way. Still, a national service program of this magnitude would not be cheap. Even if we use existing non-profit infrastructures to their maximum, the government would have to put aside (but not initially spend) money for Baby Bonds, pay out money when service is rendered, and pay for the operational costs of the program, as well.  Initial costs might run about $26 billion per year according to one estimate.

But, then, the GI Bill—which serves as a basic model for this idea—wasn’t cheap either as far as upfront costs went. No serious investment in building social capital on a national scale is cheap. Neither was the Civilian Conservation Corps cheap, but that worked, too, in economic as well as in social terms. Just like the GI Bill and the CCC, the benefits of a Baby Bond National Service Program would more than offset its costs over time. Just think of the costs we as a society already pay for prison and drug-related debilities on account of poisonous inner-city environments that trample the hopes of so many young people. We do not have to tolerate those costs, which go way beyond the merely monetary. If we look at all the cost factors involved over the long term, a national service Baby Bond program would beyond doubt be an overall economic winner for the nation. As it is, every dollar spent on AmeriCorps volunteers pays back roughly $2 in services rendered.

Besides, costs are relative. We know how many Americans will turn 18 in any given year—around 4.4 million—and we can estimate program costs within reason. If we do that math, two things become clear: first, that the United States of America, the wealthiest mass society in history, can afford the Baby Bond-National Service Program; and second, that the costs are almost trivial compared, say, to the wars of choice we have fought over the past decade, not to speak of the initial costs of the financial bailout of the post-Lehman Brothers era.

Note, too, that service is not compulsory, and that there is no penalty for demurral. Government would incur no costs in tracking down truants and dodgers, for by definition there cannot be truants or dodgers. If a person does not wish to do national service, his or her bond is merely forfeit and the money goes back into the general pool to earn interest, pay for program operations and help others. But once a culture of service is created, the opt-out rate would probably be relatively small—probably less than 40 percent once the program sets institutional roots.

Obviously, much more could be said about how this program would work and what its main challenges and many benefits would be. Clearly, intervening into the negative social patterns in our inner cities can’t wait until people are 18 years old, so supplementary programs would have to be devised. But note that sending Baby Bonders in to help rescue the mere 15 percent of our high schools nationwide (about 2,000 schools) that produce the majority of high school drop-outs can make a tremendous difference.

And we can’t wait 18 years from the passage of a bill to graduate our first Baby Bond class. We would have to devise ways to accelerate the program between now and 2029. But based on the already-existing incubus of AmeriCorps, we can find ways to scale up over time to do that.

The patterns of undergraduate university life, too, would be temporarily thrown off pattern as significant numbers of high school graduates do service instead of becoming college freshmen at age 18 or 19. But does anyone think it would be a tragedy for our young people to go to college a year or two more mature than most do now? Who is anyone kidding? It would be a huge improvement for the vast majority of our kids and our colleges alike. And besides, does anyone think that the way universities still organize themselves today won’t change fairly dramatically, by dint of technology-driven innovation, in the next few decades anyway? Surely, they will.

Of my ten ideas, this one perhaps has the greatest potential to change American society for the better in the longer run. You think it’s too hard? Then your thinking is part of the problem, so please think again.

Past Entries:

Part 1: Introduction, and Globalization/Automation

Part 2: Political/Institutional

Part 3: Corruption/Plutocracy

Part 4: Television and Politics

Part 5: The Financial System

Part 6: Tax Reform

Part 7: Health Care

Part 8: Repeal the 17th Amendment

Part 9: Government Design

Part 10: Institutional Reform

Notes:

1Some, like Pierre Rosanvallon, have argued that democracies do not need institutional trust to function well, but can rather do better through the organization of mistrust. This is an intriguing thesis with no few insights to its credit, but I think that, at least in the American case, it is mistaken. Democracy in bloodline nationalisms may differ in this regard from democracy in creedal nationalisms. See his Counter-democracy: Politics in an Age of Distrust (Cambridge University Press, 2008).

2This is not just my idea. Several organizations in the United States are dedicated to reviving a culture of service. Some leaders of these organizations joined together to write “A Call to National Service”, The American Interest (January/February 2008). My proposal is similar to this one in many ways but my version of the idea is bolder and better. See also the idea of a “futures account”, which lacks a service component, in Richard J. Gelles, The Third Lie: Why Government Programs Don’t Work and a Blueprint for Change (Left Coast Press, 2011).

3This reference to hospital ships segues to another idea: Scale up the U.S. government’s hospital ship capacity as part of a reconstituted foreign aid effort in conjunction with the building of an expeditionary health corps (an excellent idea of former Senator Bill Frist, that regrettably went nowhere). Right now, we have only one such ship, the USS Mercy, and one other privately operating ship courtesy of the old Project Hope. This is a wasted opportunity in many respects.

  • Pave Low John

    Sound like a great idea to me. The devil is obviously in the details (I personally think it might need to be administered at the state or regional level to keep it from collapsing under its own bureacratic dead weight). There are probably a whole category of incentives that could be used besides the strictly monetary, but that could probably take up a whole post in itself.

    And kudos for avoiding the call for a new draft, I have believed that conscription would solve more problems than it would create. If you think military budgets are big now, try cramming an extra 5 to 10 million untrained bodies into the DoD and see what happens to personnel costs. Plus, who wants to serve in the military with people that don’t want to be there? That’s why some folks volunteer for special operations and other selective branches, they want to be around highly motivated people who don’t require an excessive amount of micromanaging to get things done.

  • Alozsie

    A very interesting idea, but I doubt the military would have much use for the youngsters.

  • Anthony

    The future is up for grabs and the young have the most to live for; yet, they as we all face huge imponderables. Your national service/baby bond idea speaks to generational change and by implication the long-term play. This longer time horizon aptly positions the young referenced in essay to both benefit from your thoughtful proposal and subtly better meet challenges (education, diversity, social trust, environment, globalization, etc.) in decades ahead. Short term navigating can be difficult. Your proposal steers citizenry towards long term prize.

  • http://www.martinbermangorvine.com Martin Berman-Gorvine

    This is absolutely wonderful stuff and the single best idea of the many terrific ideas you have laid out in this series. Having lived for several years in Israel I can personally attest that the social cohesion produced by a culture of national service is no abstract thing, but something you feel on a day-to-day basis, on the bus, on the street or just anywhere.

  • Brian Stahl

    Dr. Garfinkle, I’m skeptical of several aspects of this. First of all, many of the programs you mention already pay something. The Peace Corps, TeachForAmerica, and the Military all pay, and many “broken windows” programs and other similar things offer some kind of stipend. So why do you think that people would be inclined to join them with this extra little bit of money?

    There is a pretty good deal of research to suggest that people are highly averse to loss — meaning that they are more afraid of losing something than they are attracted to gain. So maybe the idea that the 20k would be theirs and that they would be incurring a loss would be attractive enough to entice people into service.

    Even so, I have my doubts. TeachforAmerica and the Peacecorps require college degrees,and unless a person is otherwise attracted to doing service, I’m not sure that many would put off a lucrative career on Wall Street, or wait to begin the long slog of professional school, to go put a little extra money in the piggy bank.

    I feel like this might entice a few more people into service, but primarily just offer an extra reward for most people who would already be doing it on their own. Not to say that there’s anything wrong with that necessarily, but doesn’t extra compensation take away from the self-sacrifice, initiative, and genuine empathy that underlies a person’s decision to do service? I feel like a pecuniary reward cheapens it in a way, and might lead to less of a transformative, positive experience for many young kids who decide to put off their careers to do some good.

    There’s also a more strictly practical issue at stake here. How would you monitor the programs to insure that some of these kids are putting their best foot forward? A kid without much of a future might be inclined to join a broken windows program, but if they pick up a piece of trash every half-hour, and get rewarded with a 20k check, taxpayers aren’t going to be happy-with good reason. The federal government is not exactly known for its attention to detail, and over time the ability of a centralized program to monitor service is going to get worse and worse.

    If you don’t think that people would abuse the system, I’d encourage you to go spend some time at your local high school. Plenty of the narcisstic punks that I knew back in the day would happily take advantage of a program like this.

    Ultimately, I fear that this program, if implemented, would succumb to many of the shortcomings that other “social engineering” type programs do. (That term “social engineering” isn’t meant to be insulting in this case. After all, trying to engineer better hearts and minds is by no means a bad thing, but of course these programs often fail to live up to expectations). Anyway, I fear that if this program were implented it would be widely abused, and fail to motivate many of the people you’re targeting.

    But that’s just my two cents. Any response would be appreciated.

  • Brendan Doran

    Sir, you are attempting to rescusitate the corpse of the New Deal, forgetting it died of syphilis. Give the youth over to the Fannie/Freddie crowd? Our government is pervasively corrupt, this will simply spread it to the young. Something the educational system does already and if it doesn’t take they are made debt slaves for college degrees they are told they must have – not utterly without accuracy. Not to mention this would be a El Dorado of electoral corruption. If you’re going to cement one party rule, the PRI is not the model.

    The government as we know it must end Sir.

    National Service is not a fix. People don’t view a career in government as National Service, they view it as money and power for themselves. Pushing everyone into their corrupt maws is not an answer.

    Do keep at it though, for the most part this is a valuable effort.

  • Brendan Doran

    Corvee.

    Non.