Give up to $60,000 to every American kid at birth, says inequality expert

An economist's outside-the-box new idea to level the American playing field

Photo: Unsplash
  • An economist has proposed giving every child born in America up to $60,000 in a trust fund.
  • Inequality is locked-in with the current system in which wealth is largely inherited.
  • A "reverse social security" to promote Americans' security and well-being.

Education is considered the great equalizer, but what happens when access to it is anything but equal, as is the case in the U.S. these days? With the top-earning 10% holding 75% of the country's wealth, the great equalizer's just not an option for many. Public schools are often undervalued and underfunded, and higher education has become prohibitively expensive—or family-budget wrecking, especially for families with multiple kids.

Last week, economist at the New School Darrick Hamilton told a TED conference that the U.S. should inaugurate a "baby trust" to give all kids born in the US a trust fund of up to $60,000 at birth. It's a stunningly different proposal, and it might work if it can get enough traction to become reality.

What the 'baby trust' about?

Hamilton sees it as a sort of reverse social security for the beginning of life, "an economic birth right to capital for everyone." The plan would give the average newborn around $25,000, or more for the poorest babies, up to $60,000. Every child would get at least $500. The resulting nest egg would not be a gift so much as a remedy for a system currently out of balance. Inequality is a growing problem in the U.S. with no solution in sight other than tweaks to the tax codes and talk of placing more rigorous controls on CEO pay. It won't go away by itself, after all. As Hamilton says, "Without capital, inequality is locked in."

The idea to make all American kids trust-fund babies is, of course, radical in a country where the greatest wealth is simply passed down through families. At the same time as a child lucky enough to be born into a well-off family can expect a comfortable, healthy life ahead, the opposite is true for everyone else. As Hamilton reminded his audience, "Wealth is the paramount indicator of economic security and well-being."

How it would work

It's more than just a purely financial advantage, as Hamilton notes, "It is time to get beyond the false narrative that attributes inequalities to individual personal deficits, while largely ignoring the advantages of wealth." The implication that the less fortunate somehow deserve their lot is an additional—and insidious—barrier to climbing out of financial difficulty. "Inequality is primarily a structural problem, not a behavioral one," Hamilton told his TED audience.

Each child's trust fund would be held aside until adulthood by the federal government, and would earn an annual 2% to adjust its value to keep up with inflation. At maturity, each person would take over management of the money, hopefully investing it wisely in their future. The finer details have yet to be worked out, and obviously many—perhaps especially those doing well under the current distribution of wealth—will likely characterize it as ridiculous, and expensive at an estimated $100 billion a year. Still, many economist feel current levels of inequality are [unsustainable], and, Hamilton notes, the cost of his program is "far less than the $500-plus billion that's already being spent by the federal government on asset promotion through tax credits and subsidies."

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Experts are already predicting an 'active' 2020 hurricane season

It looks like a busy hurricane season ahead. Probably.

Image source: Shashank Sahay/unsplash
Surprising Science
  • Before the hurricane season even started in 2020, Arthur and Bertha had already blown through, and Cristobal may be brewing right now.
  • Weather forecasters see signs of a rough season ahead, with just a couple of reasons why maybe not.
  • Where's an El Niño when you need one?

Welcome to Hurricane Season 2020. 2020, of course, scoffs at this calendric event much as it has everything else that's normal — meteorologists have already used up the year's A and B storm names before we even got here. And while early storms don't necessarily mean a bruising season ahead, forecasters expect an active season this year. Maybe storms will blow away the murder hornets and 13-year locusts we had planned.

NOAA expects a busy season

According to NOAA's Climate Prediction Center, an agency of the National Weather Service, there's a 60 percent chance that we're embarking upon a season with more storms than normal. There does, however, remain a 30 percent it'll be normal. Better than usual? Unlikely: Just a 10 percent chance.

Where a normal hurricane season has an average of 12 named storms, 6 of which become hurricanes and 3 of which are major hurricanes, the Climate Prediction Center reckons we're on track for 13 to 29 storms, 6 to 10 of which will become hurricanes, and 3 to 6 of these will be category 3, 4, or 5, packing winds of 111 mph or higher.

What has forecasters concerned are two factors in particular.

This year's El Niño ("Little Boy") looks to be more of a La Niña ("Little Girl"). The two conditions are part of what's called the El Niño-Southern Oscillation (ENSO) cycle, which describes temperature fluctuations between the ocean and atmosphere in the east-central Equatorial Pacific. With an El Niño, waters in the Pacific are unusually warm, whereas a La Niña means unusually cool waters. NOAA says that an El Niño can suppress hurricane formation in the Atlantic, and this year that mitigating effect is unlikely to be present.

Second, current conditions in the Atlantic and Caribbean suggest a fertile hurricane environment:

  • The ocean there is warmer than usual.
  • There's reduced vertical wind shear.
  • Atlantic tropical trade winds are weak.
  • There have been strong West African monsoons this year.

Here's NOAA's video laying out their forecast:

But wait.

ArsTechnica spoke to hurricane scientist Phil Klotzbach, who agrees generally with NOAA, saying, "All in all, signs are certainly pointing towards an active season." Still, he notes a couple of signals that contradict that worrying outlook.

First off, Klotzbach notes that the surest sign of a rough hurricane season is when its earliest storms form in the deep tropics south of 25°N and east of the Lesser Antilles. "When you get storm formations here prior to June 1, it's typically a harbinger of an extremely active season." Fortunately, this year's hurricanes Arthur and Bertha, as well as the maybe-imminent Cristobal, formed outside this region. So there's that.

Second, Klotzbach notes that the correlation between early storm activity and a season's number of storms and intensities, is actually slightly negative. So while statistical connections aren't strongly predictive, there's at least some reason to think these early storms may augur an easy season ahead.

Image source: NOAA

Batten down the hatches early

If 2020's taught us anything, it's how to juggle multiple crises at once, and layering an active hurricane season on top of SARS-CoV-2 — not to mention everything else — poses a special challenge. Warns Treasury Secretary Wilbur Ross, "As Americans focus their attention on a safe and healthy reopening of our country, it remains critically important that we also remember to make the necessary preparations for the upcoming hurricane season." If, as many medical experts expect, we're forced back into quarantine by additional coronavirus waves, the oceanic waves slamming against our shores will best be met by storm preparations put in place in a less last-minute fashion than usual.

Ross adds, "Just as in years past, NOAA experts will stay ahead of developing hurricanes and tropical storms and provide the forecasts and warnings we depend on to stay safe."

Let's hope this, at least, can be counted on in this crazy year.

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