Thinking Citizen Blog — Should We Give Money to Babies?
Thinking Citizen Blog — Tuesday is Economics, Finance, and Business Day
Today’s topic — should we give money to babies? how much? under what conditions?
I am a middle child. A yin and yang kind of guy. I dream of building bridges across ideological chasms. Half the time I feel my soul is basically capitalist. At others, communist. When it comes to kids, I often feel like a Stalinist. Universal daycare, universal health care, no private schools, basic income for all, teachers, doctors, lawyers assigned by lottery so every child really does get a fighting chance at equality of opportunity. This ain’t rocket science. Come on, guys.
Lately, however, I have thought seriously about canceling my subscription to the New York Times because I am so sick of seeing Trump’s name at the top of almost every editorial and an op-ed piece. This has been non-stop since his election in 2016. Unrelenting. Monotonous. Mind, heart, and soul-numbing. Usually the title of the editorial or op-ed is of an ad hominem nature. And often the front page is often full of “news” that are slightly repackaged versions of the op-eds. Just last week on one and the same day these were the New York Times headlines of the op-ed pieces of David Brooks (a centrist) and Paul Krugman (a progressive) respectively: “When a heart is empty: the consequences of Trump’s inability to feel,” and “Trump’s Coronavirus Response was beyond incompetent. He just didn’t care.” Which is a long-winded introduction to the story of how thrilled I was to read a New York Times editorial with which I agreed wholeheartedly, it was entitled: “Give Money to Babies.”
Today’s post is part summary, part commentary on that article. Experts — please chime in. Correct, elaborate, elucidate.
THE NEW JERSEY BABY BOND PLAN — closing the racial wealth gap
1. “The New Jersey’s “baby bonds” plan is a potentially transformative effort in the fight against inequality.” (NYT)
2. The “baby bonds” program would create a $1,000 savings account for each child born into a New Jersey household with an annual income below about $131,000.”
3. “The money eventually could be put toward school tuition, a down payment on a house or starting a business. Mr. Murphy’s office estimates roughly three-quarters of the state’s newborns would be eligible — around 72,000 children next year.”
NB: “Black people are particularly disadvantaged by inequalities of wealth and opportunity in the United States — inequalities that are substantially a result of past and present racism.”
THE BLACK-WHITE WEALTH GAP AND BOOKER-PRESSLEY FEDERAL LEGISLATION
1.) “Black households with children have on average about one penny in wealth for every dollar held by white households with children, according to a recent analysis by the sociologists Christine Percheski and Christina Gibson-Davis.”
2. “That wealth gap has increased in recent decades and, strikingly, the gap between Black and white households with children is wider than the overall wealth gap for Black and white households.”
3. Senator Cory Booker of New Jersey and Ayanna Pressley have jointly introduced federal legislation to create a national program under which children would receive a $1,000 present at birth, plus annual contributions of up to $2,000 a year based on family income…Some children would get more than $40,000 when they turned 18.”
REPUBLICAN OPPOSITION IN NEW JERSEY, THE UK PRECEDENT, THE CORONAVIRUS LESSON
1. The New Jersey plan “has drawn fire from Republican legislators who argue that New Jersey cannot afford the roughly $80 million annual price tag. They note that Mr. Murphy is proposing sharp spending cuts, tax increases, and borrowing to deal with the fiscal effects of the coronavirus pandemic, which has hit New Jersey harder than any other state. Some conservatives also warn that children would be spoiled by the state gifts — a concern that oddly has not led those critics to demand the revival of estate taxation.”
2. “In Britain, the Conservative Party phased out the government’s gifts after taking power in 2010, offering similar arguments: The government didn’t have enough money; the children were better off without it. A version of the savings accounts still exists, as tax-advantaged vehicles for rich people to save their own money and pass it along to their children.”
3. “The coronavirus crisis instead should be seen as the strongest argument for baby bonds. It has exposed and exacerbated the inequities of life and death in New Jersey and the rest of the nation. Job losses are concentrated among lower-income workers. Their families are struggling to avoid eviction. Their children are struggling to connect to virtual schools. All the while, stock prices keep on rising.” Amen.
NB: Don’t forget. The financial services industry will absolutely love this idea! More customers! and young ones at that! The younger the better. See third link. Historical precedents: Thomas Jefferson’s idea of giving every citizen of Virginia 50 acres of land, and William Tecumseh Sherman’s idea of “Forty Acres and a Mule.” In 2020, a much better idea to have a program that grants assistance based on economic need rather than the color of your skin.
YOUR TURN — Please share:
a.) the coolest thing you learned this week related to business, economics, finance.
b.) the coolest thing you learned in your life related to business, economics, finance.
c.) anything at all related to business, economics, finance.
d.) anything at all