Are Dems right to push for giving newborns bank accounts?
- The median family income in the United States is $68,703. According to Statista, Asian and White families have higher incomes than Black and Hispanic families.
- A baby bond is defined as a policy in which the government gives money to a child at the date of birth in order to close the wealth gap. The money is not touchable until the child comes of age at 18.
- Senator Cory Booker alongside Ayanna Presley reintroduced baby bond policies (summarized here) stating it as “an effort to create generations of wealth and level the economic playing field.” He has Majority Leader Chuck Schumer, Kirsten Gillibran, Elizabeth Warman, Bernie Sander, and Amy Klobuchar in his defense, and is hopeful to gain the support of President Biden.
- By the time a child turns 18, they have the potential of $50,000 to their name.
It's no secret that in the United States, the wealth gap is significant and puts many families—especially families of color—at a disadvantage. The newborn bank accounts issue, known as the 'Baby Bonds' bill, would help decrease the wealth gap and make it easier for children of underprivileged families and communities to have a chance at building a future for themselves, rather than staying in poverty.
According to Forbes, the 'American Opportunity Accounts' will provide all babies born in the United States with $1000 'baby bonds' at birth. The bonds would gain interest annually and provide children with the financial tools to get on track in life by paying for school or starting a business and overcoming other money-related issues such as childhood medical bills and insurance costs. Medical and insurance expenses are incredibly high for young people, assisting their ability to purchase other necessities, such as a rental space, home, or vehicle.
The biggest argument against the baby bonds is how the funds will be collected for the accounts. The United States is wealthy, and there are a number of suggestions floating around for how to pay for these bonds. The Urban Institute explains that one of these methods is a 'set of tax increases geared to the wealthiest households to pay for the cost increase [. . .] these tax increases would more than offset the cost of the baby bonds.'
Providing children with the opportunity they may not otherwise have to get a good start in life can only improve our country. We will have more successful and debt-free individuals who are living healthier, happier lives.
Democrats in politics are at it once again with financial handouts amidst their recently re-proposed 'baby bonds program.' If passed, it would establish $1,000 savings accounts for newborns, subsequently adding up to $2,000 per year, with the goal of 'narrow[ing] the racial wage gap.'
It cannot be denied the detrimental effect that giving up to $50,000 per eligible child would have on the nation's economy, as the program would cost billions of dollars annually. This, compounded with the strain that coronavirus stimulus dollars have already had, further demonstrates how important it is to halt unnecessary government handouts that lead to inflation, which affects working individuals.
Another important point worth arguing addresses the possibility of young adults lacking the motivation to work for their own savings. This could also be said of the parents of potential recipients of this money. Parents should save for their children instead of relying on future funding that could be used for anything, regardless of whether it benefits the child.
It's impossible to understate the importance of adolescents eventually entering the workforce to contribute to society and gain some degree of financial independence. Being automatically given a substantial savings account could theoretically worsen financial inequality if young people spend their savings, become dependent on government funding, and then lack proper work ethic, which could save them from poverty later on.
The proposed bill is also unfair in that it would only apply to babies born after December 31, 2021, meaning that a child born just one day prior would not qualify, creating an economic equality issue based on age rather than the proposed claim of race. This proposal is nothing short of soft-core socialism that will undoubtedly aim to redistribute wealth from hard-working Americans in the name of “equity.”