The net worth of black households continues to be much lower than that of white households.
Could baby bonds help shrink that gap?
Sen. Cory Booker of New Jersey thinks so. He’s one of the contenders for the Democratic nomination for president.
His campaign platform includes a policy to give each newborn in the country a savings bond worth $1,000. Depending on the income of the child’s parents, up to $2,000 would be added to his or her government-managed fund each year until age 18. At that point, the young person could use the funds for a limited number of activities meant to help build wealth, like paying for college, starting a business or buying a house.
But how much would this plan cost? Who would pay for it? And who would benefit the most?
Two economists joined MPR News host Kerri Miller to run the numbers.
Anmol Chaddha- Research director of the Equitable Futures Lab at the Institute for the Future
Kilolo Kijakazi- Director of the integrated financial coaching project at the Urban Institute
To listen to the full conversation you can use the audio player above.