The Congress Joint Economic Committee (JEC) recently released a report touting the benefits of automatic child trust accounts or Baby Bonds, noting the resource offers economic opportunities and social mobility.
“The transition to adulthood is a challenging time for everyone,” JEC Chairman Rep. Don Beyer (D-VA) said. “Ensuring that children can enter this defining stage of life with a nest egg would open up a world of possibilities and provide new pathways to building wealth. And the positive effects of Baby Bonds are not limited to only the children and families who directly benefit from these accounts: When young adults can pursue education, start businesses and buy homes, it creates economy-wide benefits.”
Over seven million domestic families do not have access to a bank account, leaving individuals vulnerable to predatory lenders and financial instability.
“Baby Bonds are also powerful tools for reducing economic inequities by providing disadvantaged children with seed money to build a more promising future for themselves and future generations,” Beyer concluded. “These kinds of investments would be an important step toward promoting an economy that works for all.”
Dr. Darrick Hamilton, University Professor and Founding Director of the Institute on Race, Power and Political Economy at The New School, noted wealth’s true essence is functional.
“What it can do for you…wealth is as much the beginning as it is the end of an economically secure life,” Hamilton said. “Baby Bonds guarantee a birthright to capital, a nest egg, so to speak, for every child, to have a pathway to the prosperity that wealth provides. With Baby Bonds, the privilege of wealth would no longer be an exclusive domain of the wealthy. We applaud Chair Beyer and JEC’s leadership on building momentum to bring this to the American people.”