Bipartisan legislators introduced a bill in the California Senate Wednesday that would grant every child born within the state a $500 savings account, earmarked for higher education, a home downpayment, or retirement.

The cost to taxpayers? About $270 million a year. Um, hello?

We appreciate the idea of teaching young 'uns how to save for the future, sure. And we appreciate that people are working to counteract California's poverty.

But, come on . . . finance lessons from the folks that have put California in the red?

$500 is a nice chunk of change if it's in your pocket or your checking account, but it's not that significant when considering housing, education, and retirement. The article notes that:

"If families added $50 a month to the state's initial contribution, the savings account would grow to nearly $17,500 at 5 percent interest over 18 years"

So, we're assuming that these accounts, which are to be maintained by the guv'mint, will earn 5% (a rate we can't find in a savings account these days). We're also assuming that families on a shoestring budget have $50 per month that they can just throw into a non-liquid account. And if they can? $17,500 isn't much toward a housing downpayment now, let alone in 18 years. And in 18 years, maybe it'll cover a semester at City College.

The bill itself says that "recent pilot programs in California . . . have proven that low-income people can save if they have incentives and mechanisms encouraging them to do so." It specifically cites a matching funds program in Silicon Valley that requires participants to take a financial management class. This program makes sense -- the participants actively contribute, see their money grow in real time, and can use it for specific goals that are in the relatively near future (these are adults buying homes, going back to school, and starting college funds for their children). The $500 gift, only usable by the child, not until he/she 18, with no requirements or any support beyond this initial contribution (save its placement in this mythical 5%-yield savings account) seems to be a fairly useless gesture.

If the legislature can find $270 million scattered about, maybe they use it to pay down some debt. Or, if you want to teach savings to kids and families, change the scope of the program. Utilize those funds to partially match wages set aside by high school students in work study programs, for instance.

What's next, California Legislature? Efficiency lessons?