The Milken Institute, a nonprofit think tank in California, has proposed creating “Invest in America” accounts for every newborn in the U.S. The idea aims to reduce wealth inequality by providing each child with a $1,000 government-funded investment account, which would grow over their lifetime.
The Milken Institute’s report suggests investing the initial $1,000 in U.S. company stocks. These funds would be accessible at age 18 for education, job training, starting a business, or buying a home. Contributions could also come from family, employers, or nonprofits.
Wealth Inequality Concerns
The U.S. has seen a sharp rise in wealth inequality. The richest 10% of households have seen their wealth grow by 270% from 1989 to 2019, while the bottom 50% experienced only a 65% increase. The wealthiest 10% now hold 72% of the nation’s wealth.
Growth Potential
The $1,000 initial investment could grow to $8,000 after 20 years, $69,000 in 40 years, and $574,000 in 60 years. The Milken Institute also suggests making employer contributions tax-deductible to further boost these accounts.
Addressing Key Barriers
The accounts would help young adults afford education and homeownership. Many young people, especially in lower-income and minority households, struggle to buy homes due to a lack of savings. The program could also assist aspiring entrepreneurs by providing startup capital.
Support from Policymakers
Senators Cory Booker and Bob Casey have introduced similar proposals, such as Baby Bonds and “401Kids.” The Milken Institute is exploring the budget impact of its proposal and how to design tax rules for the program.
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