Senator Cory Booker has a plan to decrease the wealth gap, and it’s a rather radical one. It’s called the “American Opportunity Accounts (AOA) Bill,” and what it proposes essentially operates as publicly-funded 401K accounts, opened for every single newborn in the United States. When a child is born, the federal government would open an AOA for them, pop about $1,000 into it, and then every year, depending on the family’s income level, put anywhere from zero to $2,000 per year in the low-risk account. These newborns wouldn’t be able to access their growing wealth until they are at least 18 years old, and the funds are available for education funding, home ownership, or asset-building such as retirement savings.
The goal of these proposed accounts is to ameliorate the increasingly stark wealth inequality that has plagued the United States. According to the Urban Institute, the wealthiest Americans have 12 times the assets of middle-income families. This is not so much an accident as it is a matter of public policy and a decades-long practice of paying African Americans less than white Americans, and providing them loans that have higher-interest. It’s also in no small part because of an effort of the Federal Housing Authority and private banks working hand in hand to refuse to underwrite housing loans to black American families, making, among other things, the accumulation of generational wealth increasingly difficult for families of color.
Read more starting at ‘That’s not to say that Senator Booker’s proposed bill will only’ at………Senator Corey Booker Wants to Close the Wealth Gap By Giving Every Newborn a Trust Account. Could It Work?