How Baby Bonds Are Aiming To Level The Playing Field (And Give Your Kid $50,000)
What if, upon turning 18, your child had up to $50,000 waiting for her, completely separate from any financial assistance you may be able to provide? College becomes a reality for students who didn’t think it was. Being able to make a down payment on a home allows them to plant their own roots. That’s the goal of Baby Bonds, a concept proposed by two economists to reduce wealth inequality in the US. If it sounds too good to be true, know that we have a long way before the concept of baby bonds—in any capacity—actually comes to fruition.
Because family wealth is the biggest indicator of how successful a person will be in the United States, the economists behind the plan, Darrick Hamilton of the New School and William Darity of Duke University, proposed a sliding scale to help level the playing field. Everyone would receive some sort of bond; children of the mega-rich would just receive the lowest amount, $500. Children from the poorest families would have $50,000 waiting for them at age 18. On average, then, kids from middle-class families would receive $20,000. “Baby Bonds are like Social Security, but for young adults,” Hamilton tells the Washington Post. “This is not meant to replace our entire social safety net.”
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