OPINION: 'Baby bonds' are a forward-thinking solution to bridge the wealth divide

New Mexico has made significant strides in addressing poverty, but we must ask: Are we truly addressing the root causes of poverty and bridging the wealth divide, or are we merely offering short-term relief?

The state’s reposition from first in poverty to 17th in the nation — driven partly by a focus on the Supplemental Poverty Measure (SPM), which accounts for both cash resources and non-cash benefits like housing and food assistance — marks notable progress. However, it doesn’t mean the individuals or families relying on these benefits to survive are no longer poor.

Once we shift our focus from merely alleviating the symptoms of poverty to finding long-term solutions, we can pave the way for a more prosperous future for all New Mexicans.

Unlike the Official Poverty Measure, the United States’ standard poverty measure that considers only cash resource availability, the SPM paints a more detailed picture of poverty by factoring in resources like food, health care and housing assistance.

Though the heightened nuance provided by the SPM gives us a better understanding of the lived experiences many face, it’s important to acknowledge that programs designed to address immediate needs, while invaluable, are not a cure for poverty. In fact, they often highlight New Mexicans’ vulnerability rather than their economic independence.

Consider this: In New Mexico, approximately 72% of babies are born into Medicaid. And according to the U.S. Department of Health and Human Services, 40.3% of children in New Mexico are part of families receiving public assistance —the highest rate in the nation.

While the multitude of assistance programs New Mexico provides are essential, we also need to focus on creating pathways for long-term economic security. It’s similar to how doctors treat a disease — they don’t just focus on mitigating pain; they work toward a cure, so those painful symptoms cease entirely.

In the case of poverty, we should not only be proud of our efforts to treat its symptoms but also work toward solving the systemic issues that keep people dependent on assistance.

“Baby bonds,” a landmark initiative architected by world-renowned economist Dr. Darrick Hamilton and introduced in New Mexico by state Treasurer Laura M. Montoya and New Mexico House Speaker Javier Martínez, would establish a government-funded trust for every child born in New Mexico after July 1.

When the recipients reach adulthood, and after taking a financial literacy component, they could use the funds for government-approved wealth-building opportunities, such as down payments on a home or reliable vehicle, higher education, trade school, or startup capital for a new business venture.

With the potential to provide over $20,000 per individual by the time they turn 18, baby bonds are a forward-thinking solution that can help bridge the wealth divide and provide future generations with the financial knowledge and tools to thrive.

Unlike traditional assistance programs, which are vital in the short term, baby bonds are an investment directly in New Mexicans and offer a sustainable pathway to economic independence and wealth while building our economy.

True progress isn’t about fewer New Mexicans qualifying as poor on paper; it’s about ensuring every New Mexican has the tools to thrive on their own. But of course, baby bonds aren’t a silver bullet to address every ailment threatening our state’s economic welfare.

To create lasting positive change, we must continue to support and strengthen existing assistance programs that improve quality of life, while also investing in solutions that foster long-term economic independence.

By combining baby bonds with the robust assistance already in place, we can break generational cycles of poverty and lead New Mexicans to a brighter future.

Bushra Elfarissi is vice president of Young Democrats of New Mexico.