First, consider student debt. Black Americans would benefit disproportionately from student loan relief because they have higher average levels of debt in higher education – $ 23,400 compared to $ 16,000 for white students. Taking into account the higher enrollment rate of white students, deleting student debt would result in an average black man’s wealth of $ 8,424 and white profits of $ 6,560. This reduced the difference in racial wealth by $ 1,864.
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This would reduce the average difference between $ 54,700 by 3% and the average difference of $ 280,300 by less than 1%.
Now, look at baby connections. According to proposals accepted by Senator Corey Booker of New Jersey and others, the bonds will provide each newborn baby with a trust account, calibrated according to the parents’ wealth. The goal of this project is to ensure that all Americans have a basic level of wealth. It is not intended to achieve complete equality of racial wealth.
In particular, the focus is on bringing each child closer to the national average level of net worth in young adulthood when they have access to their personal accounts. This in turn would mean that the typical black child would have an additional $ 33,333 net worth by early adulthood.
If no white youth gets any benefit from the program – which I do not recommend – “baby bonds” would shift the average wealth ratio from 14 percent to 74 percent. This is a significant change. However, using the average or medium standard, it will leave 75% of the difference in racial wealth unchanged. And, of course, with the actual proposals, white children would also get baby bonds, so the change in the difference would be much smaller.
In short, the idea that either the forgiveness of student debt or the “baby bonds” taken alone or in combination would erase the difference in racial wealth would be a complete hoax. Both policies are desirable for a number of reasons, but making extravagant claims about their impact on black and white differences in net worth is unnecessary.
Worse, celebrating these useful programs in misleading ways distracts us from actually eradicating America’s racial Gulf of wealth. Using the average household wealth as an indicator, this difference reaches a total of about $ 11 trillion.