Baby Bonds would be expensive, decrease motivation, and do little to resolve inequality
Taylor - 22[Kiaray Taylor; University of Cincinnati, The Ohio State University 10+ years in finance spanning fixed income to emerging markets Contributor for The Balance and Crunchbase Strong advocate of a more diverse finance industry Doretha Clemon; Februrary 2022; Can Baby Bonds Fix Intergenerational Wealth Inequality? https://www.investopedia.com/can-baby-bonds-fix-intergenerational-wealth-inequality-5096825|DOA: 7-24-23]-rrm
Critics of baby bonds say it would be extremely expensive—costing up to $60 billion, according to Booker’s own figures. 2 Some have also argued that receiving funding from the federal government might actually decrease the motivation of poor young people. “If you are a child receiving a baby bond, you might have less incentive to save, less incentive to get an education, knowing that this account is sitting there,” Rachel Greszler, a research fellow in economics at the Heritage Foundation, told The Washington Post. 8 Others argue that there is little evidence that this is true. In fact, many argue that the baby bond program doesn’t go far enough. Research from Columbia University showed that even in the most “extreme” versions of the program, it would do little to address structural wealth inequality in the U.S. The top 10% of citizens would still own much more than the bottom 90%.