By Dr. Reilly S. White | March 18, 2025
Baby Bonds are an increasingly popular bipartisan government policy in which every child born into poverty receives a publicly funded trust account at birth. This “start-up capital” allows young adults to access education, home ownership, and entrepreneurship, enabling them to build wealth and lead lives that are hopeful, fulfilling, productive, prosperous, and self-directed. Follow our Baby Blogs series to learn about the vision, politics, and people behind Baby Bonds and their transformative impact on the lives of young people, their families, communities, and our economy.
In this installment of Baby Blogs, Dr. Reilly S. White, Associate Dean of Teaching and Learning and Associate Professor of Finance at the University of New Mexico, advocates for Baby Bonds as a catalyst in benefiting not just individuals, but the broader economy—addressing wealth inequality and creating opportunities that seed New Mexico’s economic growth and vitality.
*Note that there are two Baby Bond legislative proposals under consideration by the New Mexico Legislature, SB 397 and HB 7.*
Disclaimer: The views expressed in this article are my own and do not reflect the official stance of the University of New Mexico or any of its affiliated entities. This opinion is presented in a personal capacity, consistent with the University’s policies on political activity and advocacy.
New Mexico faces persistent economic challenges—high levels of wealth inequality, limited upward mobility, and systemic barriers to education and homeownership. Over the years, there’s been a great deal of bipartisan interest in developing a way to improve New Mexico along each of these dimensions. In our land of Mañana, it’s much easier to procrastinate than to accelerate, to delay rather than be decisive—yet addressing issues of this scale requires bold, forward-thinking solutions.
Enter Baby Bonds: a transformative idea that creates government-funded savings accounts for every child, accessible when they reach adulthood. These accounts, when properly and prudently invested, become a long-term investment in our future workforce, entrepreneurs, and homeowners. Picture graduating high school with not only the knowledge to navigate life, but also the financial capital to make bold choices. Would you have pursued college, launched a business, or perhaps bought a first home sooner? Baby Bonds give young adults the resources and freedom to shape their own futures, turning potential into opportunity.
Recently, State Senators Antonio “Moe” Maestas (District 26) and Leo Jaramillo (District 5) introduced SB 397, legislation to establish trust accounts for every New Mexican child born after July 1, 2025. This is Baby Bonds in action: a transformative idea that creates government-funded savings accounts for every child, accessible when they reach adulthood. These accounts, when properly and prudently invested, become a long-term investment in our future workforce, entrepreneurs, and homeowners. Imagine graduating high school not just with knowledge, but with the means to act—starting a business, pursuing college, or buying a first home. Baby Bonds give young adults the resources and freedom to shape their own futures, turning potential into opportunity.
We often talk about “intergenerational poverty” across finance and economics, where families are caught in a cycle of limited resources, restricted opportunities, and systemic barriers that are nearly impossible to escape. This cycle isn’t just about money—it’s about the lack of access to education, homeownership, and the tools necessary to build wealth over time. Without intervention, the gap between those who can invest in their future and those who cannot continues to widen, leaving generations of families further behind. The United States has the highest income inequality in the developed world. New Mexico ranks among the top 20 U.S. states with the highest income inequality.
The Price of Possibility vs. The Cost of Inaction
The question ultimately becomes, “Is this investment worth it?” Baby Bonds, for all their promise, come with a significant price tag. In New Mexico, where over 20,000 babies are born each year, the financial commitment required to fund this program seems daunting. Critics may balk at this expense, but it’s worth asking ourselves, “What’s the cost of doing nothing?”
Research on Baby Bonds has been informative. In a research study in The Review of Black Political Economy, author Naomi Zewde simulated the impact of Baby Bonds and found they could reduce the median wealth gap between young white and Black Americans from a factor of 16 to 1.4, while also decreasing wealth concentration among the top decile. In a state such as New Mexico, these findings would likely be consistent. Poorer families have little means to save extra money for their children’s future, and this provides a guarantee that would potentially enrich all New Mexicans.
Likewise, research from the Urban Institute and other studies on similar policies suggest that providing children with assets at adulthood could significantly narrow the wealth gap in the U.S. by as much as 40 percent. For New Mexico, a state with significant wealth inequality and a diverse population, the program could have transformative effects, enabling young adults to pursue higher education, homeownership, or entrepreneurship without the crushing weight of debt. Additionally, studies show that asset-building programs improve educational outcomes, financial literacy, and long-term economic stability . These impacts cascade through generations, reducing reliance on social services and increasing state tax revenues over time. Numerous articles highlight the connection between wealth and health outcomes: people who have more wealth are healthier, too.
Certainly, New Mexicans who receive the benefits of Baby Bonds will have the choice in how to spend them. What Baby Bonds do is they grant New Mexicans the safety net to try something, fail, and try again—something that anyone facing housing or food insecurity seldom finds possible. The vast majority of recipients stand to benefit from Baby Bonds: building a stronger local economy, a more diversified tax base, and potentially more incentive to stay in New Mexico and maintain our working-age population.
The Importance of Wealth Care
Since 2012, New Mexico oil production has soared tenfold. The corresponding boon in revenues derived from severance taxes and royalties has created a substantial budget surplus in our state coffers. While resource rich, we lag behind other state economies: we have few large companies headquartered here, and our population projections suggest an aging and declining population as we approach 2050. This surplus has been a tremendous boon for the state, and its allocation should be guided by opportunities that promise the greatest long-term return on investment. By strategically channeling these resources into initiatives that address systemic challenges—such as wealth inequality, workforce retention, and economic diversification—New Mexico can maximize the benefits of this windfall.
This reliance has also exposed New Mexico to what’s known as “the resource curse,” where regions heavily dependent on abundant natural resources often underperform economically. In many ways, our challenges parallel those of petrostates—nations whose economies hinge on oil exports. The pressing question is, “How do we leverage the windfall of resource extraction to build a more diverse and resilient economy?” Without a clear and compelling strategy to attract and retain our working-age population, our path to long-term economic vibrancy will remain uncertain and fraught with missed opportunities.
Economic growth follows two fundamental pathways: population expansion or increased productivity—the ability to generate more output with existing resources. Baby Bonds offer a powerful lever for the latter, equipping young adults with financial resources at a critical juncture in their lives. With this support, they can pursue higher education, launch businesses, or invest in their futures, fueling innovation and economic expansion. By addressing wealth inequality and providing opportunities to those who might otherwise be left behind, Baby Bonds serve as a catalyst for long-term productivity gains, benefiting not just individuals, but the broader economy as well.
SB397 isn’t just an investment in people; it’s an investment in the engines of economic growth that will power New Mexico’s future.
Dr. Reilly S. White, Ph.D. is the Associate Dean of Teaching and Learning and an Associate Professor of Finance with tenure at the University of New Mexico. Dr. White also serves on the board of the CFA Society of New Mexico, Director for the $5.4 Million student-run UNM Regent’s Portfolio, and leads a series of financial literacy projects in the community. Prior to his career in academia, Dr. White worked as an analyst for a large Boston-based bank, where he learned a great deal about company analysis, funding, and maintaining ethical corporate leadership. He has consulted with investment managers and municipalities on maintaining optimal portfolio strategies, particularly in response to economic challenges.
If you missed previous installments of our Baby Blogs series, read them here.
Learn more about Baby Bonds in New Mexico.
To share feedback on this blog, or for questions about Baby Bonds, email David Radcliffe at radclifd@newschool.edu.
To learn more, explore our Baby Bonds resources.