- Two economists have proposed an idea for "Baby Bonds," a one-time deposit into a child's bank account at the time they're born.
- The program would help create upward mobility and reduce inequality in the US, they claim.
- Rich families would receive around $500 while poor ones would receive up to $50,000.
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Some economists want the US government to put up to $50,000 in 'Baby Bond' bank accounts
The program would help create upward mobility and reduce inequality in the US, they claim.
Darrick Hamilton and William Darity have a thought-provoking way to help families pay for college: Give every baby between $500 and $50,000 at the time they are born.
Hamilton and Darity, both economists, say these "Baby Bond" accounts could go a long way toward reducing inequality in the US, where a raft of research has found academic achievement is directly tied to familial wealth.
The solution Hamilton and Darity presented at the recent American Economic Association conference was a federal government program that deposits between $500 for ultra-rich families, and $50,000 for extremely poor families, in an account they can't touch until the child turns 18.
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The philosophy mirrors the one found in the basic income community, which has asserted that poverty isn't a lack of character so much as it's a lack of cash. Poor people should be trusted with handouts, they argue, because those in poverty know how to help themselves.
Some research on cash transfers has found people don't often spend the money on things like alcohol and cigarettes; in certain cases, purchases actually decrease.
Caroline Teti, field director for GiveDirectly, a charity currently awarding basic income for 12 years to certain villages in Kenya, said the logic and outcomes are both straightforward.
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