The wealthiest 10% of the US stock market owns 93% of all household stock market wealth, a record high. The Institute for Policy Studies found that the richest 1 percent owns 54% of public equity markets, up from 40% in 2002. The bottom half of the country owns just 1%. The Fed estimates that 58% of US households have some money in the stock market, mostly through retirement funds like IRAs and mutual funds.

However, this trend is missing a key trend: nearly all wealth is controlled by the wealthiest 10% of us. To boost wealth ownership of the bottom half of households, Senator Cory Booker and Representative Ayanna Pressley have introduced the American Opportunity Act, a federal baby bond bill. The proposal proposes that children receive a $1,000 savings account at birth, with annual contributions ranging from $2,000 to $2,000, depending on their family income.

Baby bond programs, created by states like Connecticut and Washington, D.C., aim to reduce the racial wealth divide and boost the wealth of low-income households. Starting in July 2023, Connecticut began depositing $3,200 into a trust in the name of each new baby born into a household eligible for Medicaid. The funds could be invested in mutual funds and retirement funds to increase the nest eggs for non-wealthy individuals. The program, known as HUSKY after the state college mascot, aims to reduce the racial wealth divide.

Connecticut residents can redeem HUSKY bonds between the ages of 18 and 30, which are tax-exempt and available for investments like higher education, homeownership, and small business start-ups. Other states considering baby bond legislation include California, Massachusetts, Maryland, North Carolina, New Jersey, Nevada, Washington, Wisconsin, and Vermont. These innovative programs aim to reduce the concentration of wealth at the top of the economic ladder, a crucial issue in an age of unprecedented inequality.