New Jersey Proposes $1,000 'Baby Bond' As Wealth Gap Hits Extreme

New Jersey Proposes $1,000 'Baby Bond' As Wealth Gap Hits Extreme Tyler Durden Wed, 08/26/2020 - 18:45 The wealth gap between in America is the widest in history, or at least the 244-year history of the country. In a bid to address the decades of social-imbalances, mostly a byproduct of de-industrialization, technological advances, and, of course, the Federal Reserve's monetary policies, New Jersey's own U.S. Senator Cory Booker has proposed a new plan to invest $1,000 at birth in a nest egg for children in low-income households, which could, at one day, give them a financial lift, only accessible at the age of 18. As NYT explains: "The idea to give out the so-called baby bonds is a scaled-down version of legislation introduced by Senator Cory Booker, Democrat of New Jersey, to help address a disparity that, on average, has left white families in the United States seven times wealthier than their Black counterparts." Governor Phil Murphy could announce the new program as early as Tuesday. The New York Times said, "the move would be a small but tangible step toward confronting inequities that have been brought into particularly stark relief by the coronavirus pandemic, which has disproportionately affected Black and Latino people, who have died and lost jobs at far higher rates."  "The inequities are too wide, too raw, to ignore," Murphy said in an interview. Every baby born in 2021, to households who earn less than $131,000 per year, are eligible for the new "baby bonds". The plan will cost an estimated $72 million in 2021, with approximately 72,000 babies expected to qualify.  "The source of inequality generally is that some young adults have capital and others do not," said Darrick Hamilton, a professor of economics and urban policy at The New School in New York City. "The difference between a renter and a homeowner is a down payment." "This is saying: Irrespective to the family you are born into, that you have a birthright to capital when you become an adult," Hamilton added. The $1,000 nest egg, with interest over 18 years, would be worth around $1,270 in 2039.  To put the baby bonds in perspective for readers, this could be the beginning innings of People's Quantitative Easing (PQE), where the Fed monetizes treasury debt to fund direct transfer payments.  With the Trump administration already conducting massive "helicopter money" drops to corporations, households, farmers, and anyone else - we outlined in early August this is only the beginning (see: "The Fed Is Planning To Send Money Directly To Americans In The Next Crisis"). 
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