Why Baby Bonds Are a Bust – Justin Vassallo/Compact
“What working American families need—what all American families need, in fact—is a system that encourages both parents to engage in more at-home activities while supporting and expanding family-based public recreation; and in-kind subsidies and labor-market regulations that alleviate the stress of working parents, especially those dependent on hourly wages. If more essentials were covered in early childhood, and new parents were less compelled to return to full-time employment (or “on-call” part-time employment), the country might have better odds at reversing many disturbing developmental trends, from drug abuse to teenage suicidal ideation to the decline of two-parent homes.
“On that note, nothing suggests that baby bonds will dramatically alter family formation in the United States. The reality is that it has become extraordinarily expensive to raise a family on a “high-wage” blue-collar or middle-class income since at least the early aughts; indeed, these costs have likely contributed to the declining fertility rate, which economist Melissa S. Kearney has traced to the Great Recession and its lingering effects. Baby bonds might instill the working poor with more optimism, but as structured, they are unlikely to incentivize marriage or inspire confidence that America’s political class, Democratic and Republican, is really focused on making it easier to parent.
“None of this is to say baby bonds couldn’t be part of a far-ranging social-democratic transformation of the American economy. Wealth and income inequality in all its forms should be tackled…”
Instead of baby bonds, the government could provide each kid applying for a Social Security card to enter the workforce with a contribution to an IRA account or employee retirement plan. Part of the government contribution could be used for education or work training expenses. In this way, all Americans would be owners of working capital and retirement savings could be universal. Now, most of “bottom 50%” is left out.