What if a single, cheap, easy-to-administer, and race-neutral policy could help close the country’s chasmic racial wealth gap in less than a generation?
Reader, it exists. It is called a baby-bond program. For something like $80 billion a year—roughly 2 percent of the annual federal budget, less than a tenth of the annual cost of Social Security—the United States could not only end its most pernicious forms of poverty, reduce wealth inequality, improve social mobility, foster self-sufficiency among poor families, and increase family net worth en masse, but also put black and white families on more equal footing.
A little-known but elegant solution is waiting for implementation, a policy suggested by Thomas Paine in Agrarian Justice and rewritten for the modern era by Darrick Hamilton, who leads the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University, and Sandy Darity, the director of the Samuel DuBois Cook Center on Social Equity at Duke University. Baby bonds are simple. The government would create investment accounts for infants, giving babies born to poor families large seed grants and babies born to rich families small ones. The money would grow, and kids would gain access to it when they reached adulthood, to use for school, a down payment, or a start-up.