Taking ownership in the future

THE "OWNERSHIP SOCIETY" that President Bush has placed at the top of his domestic agenda for his second term is one in which all Americans enjoy greater financial independence and the ability to make more choices about how to save and plan for major life events. As President Bush has said, "The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country."

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Rather than an ownership society, we live in what is increasingly a debtor's society. According to the Federal Reserve, 40 percent of American families spend more than they earn, and the average family consistently carries almost $6,000 of credit card debt per month. The cost of higher education is spiraling upward, with the College Board citing an increase of 38 percent in the cost of both public and private higher education over the last 10 years after adjusting for inflation. A recent study by the National Low Income Housing Coalition showed that the average American worker must earn three times the federal minimum wage of $5.15 an hour in order to afford to rent a two-bedroom apartment. Clearly, many Americans could use a boost in their financial vitality.

With the creation of a National Service Baby Bond initiative, the benefits of an ownership society would be linked to national service. Here's how it would work: the government would invest $6,000 for every child born in America. As proposed by the New America Foundation, if such a bond accrued interest at a rate of 7 percent, this fund would be worth $20,000 when the child turned 18, and would be worth $45,000 by the age of 30. Additionally, parents and family members would be able to contribute to a child's bond tax free.

In order to collect this bond, young people would have to earn their civic stripes by dedicating a year or two of full-time military or domestic service to America. By engaging in a year of full-time service between the ages of 18 and 30, each citizen would earn access to 50 percent of the bond, and through two years of full-time service the remainder of the bond would become accessible. A young person could choose to use his or her National Service Baby Bond to access the American dream by applying it toward the cost of higher education, the down payment on a home, starting a small business or nonprofit, or establishing an IRA for retirement security.

If all 4 million young people born in America each year chose to serve the full two years, then the cost of a National Service Baby Bond initiative would be approximately $24 billion each year. Annual government spending on corrections, including imprisonment and correction centers, is more than twice this amount.

A strong democracy requires not only a strong economy, but also requires active citizens who have the civic values, skills, and inspiration to serve as leaders for the common good. National service is both a proven vehicle for civic engagement and a good investment. An independent cost-benefit study found that programs supported by the federal national service initiative AmeriCorps returned between $1.60 and $2.60 for every dollar spent. Whether teaching a child to read, building a playground, painting a community mural, or making sure the elderly have access to food and medicine, national service allows Americans to feel useful, engaged, and effective. A person who has participated in national service is much more likely to remain an engaged citizen for life.

Support for universal national service is widespread. President Bush set forth a vision for national service when he called on every citizen to dedicate two years or 4,000 hours in service to America in his 2002 State of the Union Address. After Sept. 11, 2001, applications to both the Peace Corps and its domestic counterpart, AmeriCorps, doubled. In December 2001, a poll revealed that 81 percent of Americans supported efforts by the federal government to encourage increased community and national service among Americans, and 70 percent supported dramatically enlarging America's national service program.

Through the establishment of a National Service Baby Bond as part of an "ownership society," we can help make the American Dream a reality for a new generation and make America a stronger democracy for all.

Alan Khazei is CEO of City Year. Michael Brown is president of City Year.