‘Baby Bonds’ would give kids a boost
Idea is to help eliminate wealth inequality with little nest eggs
Imagine if, upon turning 18, a child suddenly had access to a small nest egg, provided by the U.S. government.
That’s precisely the idea behind a “Baby Bond” proposal, which would give every newborn in the U.S. an account with somewhere between $500 to $50,000 in cash — but the child could not access the funds until their 18th birthday.
According to a report in the San Diego Union-Tribune, the goal behind Baby Bonds is to lessen wealth inequality in the U.S.
Using a sliding scale, children who come from wealthy backgrounds would receive less, while children of poor families would receive more.
The idea stems from Darrick Hamilton, an economist who recently presented the idea at the American Economic Association conference, according to the San Diego Union-Tribune report.
Lots of questions remain, such as how the proposal would be paid for. The San Diego Union-Tribune article notes that the project would have an estimated price tag of $80 billion a year (about 2 percent of the federal budget), and Hamilton notes that money could come from incentives in the tax code.
According to an NPR report, the trust funds would be guaranteed to grow at the rate of inflation plus 1 percent a year until the child turns 18.
But imagine graduating from high school, and having a little cash waiting for you. The Tribune article notes that such an amount of money could help pay for college, or be a down payment for a home, or help start a new business.
The ultimate goal is to reduce wealth inequality, by giving children a boost as they enter adulthood. The concept is an intriguing one. Having access to money can offer more opportunities to people, such as higher education, without worrying about incurring an overwhelming amount of debt. Some make the decision to not attend college out of concerns about the debt.
On the flip side, however, the proposal is not a cheap option. And there could be concerns about turning over, in some cases, a sizable amount of money to a freshly minted adult. Would every 18-year-old have the wisdom and common sense necessary to handle a sudden windfall?
What do you think, readers? Is the Baby Bond idea one worth pursuing to help alleviate wealth disparities, or no? Share your thoughts online at www.YumaSun.com, or send us a Letter to the Editor at letters@ yumasun.com
Wow, what a great book. I recently purchased “When There Is Water” and met the writers/photographers. Yuma, you can be so proud of these young people. They did a great job with this project. It is an incredible book. I can hardly wait to share it with my friends and family in Wisconsin who can’t quite understand when I talk about all the agriculture in Yuma — our winter home in the desert. Thank you students and all the others involved in this project. And a thank you to you, the Yuma Sun, for printing the article about the book-signing — that is the only way I knew about it.
Sincerely,