This was published today by Cory Booker in the Opinion section of NJ.com:
Wealth, unlike income, is often passed from one generation to the next — and with it, access to opportunity. Those who have wealth can do things like buy a home, get a college degree without being saddled with debt, or start a small business. Those who start life without wealth are often robbed of the opportunity to ever get it.
Today, the gap between those who have wealth and those who don’t is at its highest point in decades — in 1963, families near the top had six times the wealth of families in the middle; by 2016, they had 12 times the wealth. And this gap is particularly stark along racial lines — a recent study by the New Jersey Institute of Social Justice found that the median net worth for a Black or Latino/a New Jerseyan is $179, compared to $106,210 for a white New Jerseyan.
The same is true nationally: the median Black family has about $1 in wealth for every $8 held by the median white family. Put even more starkly, the 400 wealthiest Americans, according to Forbes magazine hold more wealth than all Black families in the U.S., combined.
The wealth gap in America is an urgent crisis that is denying generation after generation of New Jerseyans access to opportunity. That’s why I’ve proposed giving every child born each year in our country — including the 100,000 New Jerseyans born each year — a “Baby Bond” — a savings account seeded with $1,000 at birth that will grow in value as every child grows up. Depending on a family’s income, a child would receive up to an additional $2,000 added to their account, plus interest, each year — in New Jersey alone, roughly one in eight kids would qualify for this full payment.
By age 18, a child could access up to $50,000 to pay for college, put a down payment on a home, or jump-start a small business — the kinds of investments that create intergenerational wealth and change life trajectories.
As President Biden seeks to ‘build back better’ our economy in the wake of the devastating pandemic, he should embrace Baby Bonds as an idea that can help level the playing field and expand opportunity to every American child.
A 2019 study out of Columbia University found that a proposal like this one would be so effective at closing the racial wealth gap that it would nearly eliminate it among young adults. Additionally, a McKinsey report found that closing the racial wealth gap in America could grow our economy for everyone by 4% – 6% of our GDP — or anywhere between $1 trillion and $1.5 trillion.
We in New Jersey are proud of our Senator Cory Booker. It is this kind of innovative thinking and out-of-the-box creative solutions which make him the outstanding legislative leader that all the other senators aspire to be and look upon for guidance. Who else but Senator Booker could conceive such an idea as Baby Bonds for all children with annual supplements for minority children? They are a great alternative to Bail Bonds, to be sure.
Economic inequality – income inequality; the wealth gap between the rich and the poor, usually expressed as income rather than net worth.
Economic inequality occurs in any society with a class structure, such as monarchism, feudalism, social democracy, and capitalism. It is essential to all forms of capitalism, whether industrial, retail, or financial. It can only be abolished through communism, where classes cease to exist, and all wealth is owned collectively.
Economic intervention – any interference by government in the operation of the free market in a capitalist system.
Economic interventions include but are not limited to taxes, subsidies, regulations, rationing, bailouts, quotas, caps, and tariffs. These interventions often have nothing to do with economics per se, but rather with policies related to the environment, climate change, alternative energy, and workplace equality which have economic consequences. Their primary intent is to incentivize or disincentivize human behavior via social engineering, or to assist a favored industry via crony capitalism, but they have a secondary impact on the economy as a whole.
Laissez-faire capitalists oppose economic interventionism as interference with the complex equilibrium maintained by the feedback relationship between supply, demand, and price. Socialists, on the other hand, support those interventions that incentivize behavior or place a burden on the private sector, while opposing those that rescue a failing capitalist system and delay its anticipated collapse and replacement by socialism.
Social democrats, who merge the social welfare features of socialism with the wealth creation of capitalism, are perfectly content with economic interventions, the power of central banks to set interest rates, and the Keynesian fiscal policy of stimulating the economy through governmental borrowing and spending. They also support eco-socialism (eco- for ecology), which imposes environmental regulations on capitalist industries.
Economic justice – the elimination of income inequality through the redistribution or abolition of wealth and private property.
Economic justice is a form of distributive justice. It can only be achieved fully through the confiscation of private property and the forceful expropriation of wealth, as was implemented in the former USSR.
Economic and social justice are intimately related in theory but often disconnected in practice. Even in the USSR, economic equality did not result in full economic or social justice. The commissars, nomenklatura, and higher-level apparatchiks enjoyed special privileges and educational opportunities, as well as special apartments and stores, automobiles, and countryside dachas. They became a bureaucratic ruling class which caught the attention and criticism of Trotsky and Schachtman, among others. Furthermore, a disproportionate number of men occupied higher-level positions, which had a disparate impact on women.
In non-totalitarian states such as the social democracies of western Europe, and to a lesser extent in the United States, social inequalities still exist and economic inequality is only partly ameliorated through taxation and welfare.