This Economic Policy Could Break the Poverty Cycle

The “American dream” has long been regarded as the pinnacle of success, rewarded to all who display hard work and pick themselves up by their bootstraps when life knocks them down. This might be our culture’s prevailing narrative, but it actually rarely bears out this way. The truth is that our system is full of inequities that put large swaths of people in our country at significant odds with building wealth. Intergenerational wealth, or the passing on of wealth within generations of a family, gives a notable advantage to those who have it, and often leaves those who don’t economically burdened. Income inequality in the U.S. continues to persist and the median income of white people largely outsizes that of people of color. This disparity has plagued generations, greatly reducing the ability of people of color to start businesses, pursue higher education, and buy homes. Enter baby bonds, an economic policy in which every child at birth receives an income-dependent government-funded savings account, managed by federal, state, or local governments until adulthood. The end goal? Breaking the cycle of poverty and closing the racial wealth gap to ensure economic stability for future generations. In this episode we’re exploring baby bonds and the national legislation that is seeking to create systemic equality nationwide. Joining us first is economist Darrick Hamilton, founding director of the Institute on Race, Power and Political Economy at The New School, who has been at the helm of the progress on this idea. Then we speak with U.S. Rep. Ayanna Pressley (D-Mass.) about the American Opportunities Account Act, a bill introduced by her and Sen. Cory Booker that would implement baby bonds on a national scale. To learn more about baby bonds and Darrick Hamilton's economic justice work, visit: https://racepowerpolicy.org/baby-bonds/