Everyone loves babies. We take pictures of them, we say they are cute even when they aren't, and politicians phrase every possible stance in terms of "protecting the children." Sen. Hillary Clinton took that bit one step further: she wants to give every baby born in the US $5000 a piece. The idea is to put the money in a savings account, so that they can use the money for college or a house down the line.
Unfortunately, the math gets in the way of the reality. First, such a program would cost $20 billion - $5K for the 4 million kids born every year. Unless the program is handled like Social Security, where the government could borrow against it, it basically amounts to a larger version of the Earned Income Tax Credit - which actually sounds good. Unfortunately, the only there are only three ways to pay for such a program: cut something else (HRC would never do it), raise taxes, or increase deficit spending.
The real problem with Sen. Clinton's program however is that giving every kid five large isn't going to encourage saving. When interest rates are low, the economy is in spending mode, not saving mode. And if the interest rate on a savings account is less than the rate of inflation - it doesn't make sense to save anyway.
It sounds bad, but thanks to inflation you are better off going into debt - because the money you pay back is worth less than the money you originally borrowed. If you get a low enough rate on your debt - you may even come out ahead. It's also why young people are encouraged to invest in high risk/high return stocks and funds for their 401k - they need to beat the rate of inflation while they are young and can work.
What would make more sense is a $5K credit for the parents when they have a kid. Baby expenses are huge - and if they can get a tax break that first year, it would lead to fewer headaches. But no one would ever go for that.