Here’s an idea from two university economists: give every newborn in the United States anywhere from $500 to $50,000 in cash and don’t let them, or their parents, touch it until their 18th birthday. Then they can do whatever they want with the money.
Darrick Hamilton of New York City’s New School and William Darity of Duke University think “Baby Bonds” could combat wealth inequality even if it would cost taxpayers a pretty penny, about $80 billion every year. The amount given to each child would depend on their parents income. Examples in The Washington Post included Bill and Melinda Gates and Beyonce and Jay-Z who would only get the base amount (as if they need it) of $500. Children born into poverty would get the top amount, or $50,000 each.
“A typical middle-class baby would receive around $20,000,” The Post estimates.
The economists think this is a great idea to help minorities have as fair a shot as white people. The argument that blacks or Latinos should be “more responsible” or make “better decisions” if they want inequality reduced is no good to Hamilton or Darity, who believe that only government handouts can do that.
But Britain tried a Child Trust Fund for every child born between 2002 and 2010, giving them just 250 to 1,000 pounds each and even with that small amount the program was scrapped because it drained the budget.
Candidate Hillary Clinton proposed a type of Baby Bonds during her 2008 campaign: “I like the idea of giving every baby born in America a $5,000 account that will grow over time, so that when that young person turns 18, if they have finished high school, they will be able to access it to go to college, or maybe they will be able to make that down payment on their first home.”
But according to these economists, Clinton’s plan doesn’t go far enough.
“Wealth gives you choice. Wealth gives you freedom. Wealth gives you opportunity,” Hamilton argues. “But it takes wealth to beget more wealth.”
And apparently it takes other people’s wealth to beget wealth for other people. Sure, that makes total sense.