This Plan to Give Infants $20,000 Could Put a Dent in Income Inequality

Friday, January 12, 2018

Two economists have a plan for reducing the US’s rampant income equality problem, one that would create a $20,000-$60,000 ‘baby bond’ for all children born in the US, for use after their 18th birthday. While this is already done at a much lower £500 ($684.48) price point in England, the plan could be a great way to address the fact that the next generation of American parents will by in large make less money than their predecessors.

According to Darrick Hamilton of the New School and William Darity of Duke University, the economists who presented the idea at an American Economic Association conference last week, the money invested at birth can help kids purchase a home, pay for college, or start a business. Darity iterated to the Kansas City Star how 40 percent of the wealth in the US ($36 trillion) is owned by one percent of the population, but he ensured commonly used statistic didn’t go in one ear and out the other by noting that the ‘baby bonds’ plan would only cost about $80 billion a year (about 0.5 percent of that 36 trillion). The Trump administration has already expressed some ‘genuine’ interest in reducing economic burdens placed on new parents back in February of 2017.

Read the full article here.