Posted by 26 August 2020
If you are born into a family that earns up to 500% of the federal poverty level, New Jersey Governor Phil Murphy wants the state to give you a $1,000 “baby bond.”
Under a proposal unveiled by Gov. Murphy this week, the state would place $1,000 in an account for most New Jersey children. That money would accrue interest and be payable when the child is 18. This would apply to any children who are in households that earn under 500% of the federal poverty level (roughly $131,000 for a family of four). Gov. Murphy estimates 75% of New Jersey children would qualify.
Gov. Murphy and supporters of these bonds contend that they will help reduce inequality. They contend that they will provide money for young adults who otherwise may not have a savings account, giving them a better start in life. This is part of Gov. Murphy’s legislative proposals that he contends will reduce inequality.
Critics of the bonds counter that they will do very little to help, since they will not accrue significant interest in 18 years. They argue that this is an expensive measure that is more about looking like the governor is helping address inequality instead of taking real measures to help the poor. The first-year cost of the program would be approximately $80 million.
New Jersey Senator Cory Booker has proposed similar legislation at the federal level. The New Jersey legislature must approve Gov. Murphy’s “baby bond” plan before it goes into effect.
Do you think the government should give every child a $1,000 bond that matures when the child turns 18?