I have ongoing debates with people that are on my-side of the political fence that are determined to keep demanding that the system that supports them being high income and high wealth is fair enough and that the rest just don't work hard enough or make the right decisions, and that is why they are stuck in lower income and wealth.
While certainly there are plenty of lazy people prone to making bad life decisions, my peers of conservative libertarian economic thinking are fooling themselves that we have not gone far passed the time that we can claim we have a well-functioning democratic capitalist system. What we have today is a globalist corporatist system... maybe a global corporatocracy. It is powered by Wall Street, and it is focused almost exclusively on wealth creation for the top 10% from higher investment returns and higher corporate profit... and the expense of almost everything else.
We need massive new rules to stop the corporate consolidation that is killing competition and cutting out too many people from access to the real economy.
I think Trump Accounts are a good example of much that is wrong with our economy and our country: it’s a program that is unserious, nonsensical, mostly sloganeering, and where the benefits mostly accrue for many years primarily to the wealthy.
Sure, let’s have yet another vehicle to help people save money for the future. That’s fine. But that can be done – and mostly already existed before this latest law. The only new twist here is the government contribution. So let’s focus on that.
Here’s what it is: the federal government prints $1,000 in new money, which is inflationary, and adds it to the existing federal debt. For the rest of history, our children and grandchildren will pay interest to the rich people and governments who buy Treasury bonds to finance this debt.
That new debt is then handed out to a child, and sits for 18 years, further propping up the S&P 500 equity bubble that overwhelmingly benefits the top 25% of Americans (and distorts our economy). Wall St. bankers will generate fees for managing these Trump accounts for 18 years before a child can even touch it.
Then, 18 years from now, the account holder will turn 18, and have perhaps $7,000 in the account handed to them to do whatever they want with. (Of course, these are nominal dollars. Who knows what buying power will remain after inflation continues to do its dirty deed for the next 18 years.) The newly-minted 18 year-old can cash it out immediately by paying a 10% fine, using the remaining $6,300 to pay tuition, put towards the purchase of a car, create the next Tesla, or spend on DraftKings and vape products. There will be some wonderful conflicts in families as Uncle Sam hands a teenager $6,300 cash beyond his or her parents’ legal control.
The simple question that obliterates the Trump Account fantasy is this: if printing $15 billion in new debt over the first 10 years (one program estimate) and dropping it into the S&P 500 in $1,000 increments makes sense, why not print $150 billion – or $15 trillion – and drop it into the stock market?
To even ask the question is considered unkind – why be a killjoy?!?! Printing money today and sending the bill to future Americans is THE AMERICAN WAY!
But someone has to speak truth to nonsense. Printing money and stuffing it into the stock market does NOT generate wealth, even if no one has the cojones to admit it. But it sure helps the wealthy and rich keep the bubble bubbling.
A total scam. Conservatives should admit it. And maybe they will, once they get done talking about our great new victory over Iran.
How much would the accounts be worth if they can’t be touched for 65 years? And remember they can be combined with Biden’s Savers Match. I would also tax this money very progressively after 65 so that these accounts get everyone to essentially max SS benefits AND allow for higher Medicare premiums and copays with Obamacare CSRs (very progressive). So wealthy people’s accounts would essentially be taxed at 100% but would still be there if they somehow went bankrupt at 70. The lump sum at death would also be taxed progressively.
A whole lot of nominal dollars. But that's irrelevant unless the magic math is real. And if the magic math is real, then we should print trillions of dollars and put it in the S&P 500. Unfortunately, printing money and throwing it in the stock market does not create wealth. It creates more inflation, more federal debt (every grand given away is added to the debt forever), more interest paid to already rich holders of Treasuries, and more fees for already-rich bankers.
No, getting everyone invested in the stock market now with both parties more focused on workers is the best time to get everyone invested in the stock market. The S&P 500 has a literal 100 year track record and in fact its worst performance was during Bush/Cheney which was the administration that was by far most beholden to corporate interests…so corporations should know a president looking out for them is bad economics!!
So maximizing shareholder value with presidents like Obama and Biden and Clinton (and to a lesser degree but still positive Trump) would be good for working Americans because it’s the most obvious way to get 10% returns for all Americans and more retirement savings!! And guess how we could pay for it? Have corporate America pick up the $4 billion a year or just keep paying for it with deficit spending!
Btw, I even support Rubio’s maternity program paid for by SS because it gets mothers cash and we have 40 years to rescind the hit the mother’s SS payments. So unless you have a quicker way to get mothers cash then we should go with Rubio’s solution.
It’s a stupid idea. Just contributing $1,000 to a 529 account would be more useful. How many of those accounts will have just the original $1,000 plus gains, if any, when the child turns 18. We already have ways to do what these accounts purport to do. Trump just wants his name on something. Screw that.
Nice idea in theory. But unless we get people out of actual poverty, most of this will be consumed as soon as the beneficiaries turn 18. The people pushing this have never studied economics, particularly behavioral economics, sociology, psychology etc. Bet.
This is just another proposal to make poor and lower middle class people think that the current administration cares about them. It is in the same category as lowering taxes on Social Security (which does not help the poor because most are not paying taxes on this income) and "no tax on tips". Meanwhile the federal deficit is growing rapidly and income tax dodges for the risk go untouched. How about taxing investment income the same as labor income? How about dealing with our very high overhead health insurance system. This is just a diversion and not a good one.
The poor will often put this money in a savings account or a high-risk equity investment with big time fees.
This is actually not a bad idea. I went looking for things like maybe contributions are deductions like the IRA, nope. Makes it more fair for lower income. Also looked for withdrawals for emergencies like dad's beer fund. Nope. I went looking for bad parts, and found none.
Every poor mom in America dreams of good things for their kids. Especially during infancy, toddler, and pre puberty. All the time before they drive you to the poor house. Moms would put money in these accounts. With compounding the money adds up.
I have a real hard time even convincing adults to invest. They think it's complicated, it's not. Knowing how to manage your own money can change one's life
This is the greatest idea in recent memory. If you understand behavioral economics at all, giving every American kid a nudge towards capitalism vs socialism (becoming popular along younger generations) is worth every penny for the healthy as well as prosperity of a democratic free market based economy. Instead of brain washing our kids with left-wing ideology and teaching them to hate the founders and older generations, how about lowering the barrier to entry for a personal laboratory to experiment with capitalism? It’s not a magic bullet - there is none on planet Earth - but it’s money well spent for the common wealth of humanity.
In response to: Government Imposes Restrictions on How Child Trust Fund Money Can Be Spent
Nope. Simply, nope. Once a child reaches age 18, they can spend trust or custodial account money on absolutely anything they want. Because they legally gain total ownership and control, they are not restricted to just educational or medical expenses and can freely use the funds for living expenses, vehicles, travel, or investments.
In Response to: Child Trust Funds Are Used as Excuses to Cut or Eliminate More Efficient and Fair Public Programs
Which ones were eliminated in favor of Trump Accounts?
I agree, that should they be a success, our Democratic and Republican Congressional idiots of the future may decide, after Social Security celebrates its 100+ anniversary, to remake Social Security into a welfare, means-tested program.
You state: "... Trump Account supporters proudly frame them as a stealth form of Social Security privatization. ..." I agree, leading Republicans, including Sen. Ted Cruz and Treasury Secretary Scott Bessent, have referred to these accounts as a "backdoor" or "dirty little secret" toward achieving long-held conservative goals of privatizing Social Security. The concept relies on the idea that shifting government contributions into stock market-invested accounts accustoms the public to personal retirement investing rather than relying solely on traditional, government-funded safety nets.
However, that's won't affect Social Security or Medicare benefits unless Congress acts. It will likely impact funding of Medicare Part B and D (including IRMAA, Health Reform's Net Investment Income Tax (NIIT), etc.)
However, unless Trump Accounts are universal with significant accumulations (highly unlikely to be widespread, even less likely not to be spent between ages 18 - 62), fat chance they will become a "backdoor" for privatized investment of Social Security monies.
In response to: "... To the five congenital flaws of all mainstream child trust fund proposals, the Trump administration and Republicans in Congress have added a sixth—Trump Accounts are incredibly, unbelievably, grotesquely regressive. ..."
Sorry, that's like arguing the Individual Retirement Account, added by a super majority Democratic Congress in 1974, and touted by 23+ mostly Democratic run state legislatures in their Roth IRA initiatives, is "unbelievably, grotesquely regressive". Here's what some of thosse Democratic Governors had to say about their Roth IRA mandates:
California Governor Gavin Newsom famously praised the state's CalSavers retirement program as a way to "level the playing field for millions of Californians" who would otherwise lack access to a workplace retirement plan.
Connecticut Governor Ned Lamont championed the MyCTSavings program as a way to offer hardworking residents "a smart new way to make investments for their futures."
Governor Wes Moore emphasizes that the MarylandSaves program provides a "pathway to... wealth for every family in Maryland" and ensures that "Marylanders who work hard are rewarded"
Aborting Trump Accounts before they are born makes little sense. If, in fact, your fears come to pass, remember that the federal government support for the program in the form of a $1,000 contribution doesn't apply to those born after December 31, 2028. And, Congress can amend IRC 125 at any time to remove that tax preference (even though the Administratoin has yet to confirm/finalize non-discrimination tests under IRC 125 and IRC 129).
However, while the the next President and her/his Administration may not favor extending the $1,000 credit, everyone will be surprised to see revocation of the Trump Accounts.
I suspect you aren't enamored with Trump Accounts in part because of the name. How about we rename them as 530A Accounts. Or, feel free to pitch my preferred name: The Ben Franklin Child IRAs.
I posted this elsewhere, same topic, in response to criticism of Trump Accounts:
I too have concerns about Trump Accounts. Top of mind is the decision to provide $1,000, via more deficit spending, sending the bill to taxpayers too young to vote and generations yet unborn.
Instead, I would have replicated the spousal IRA to also apply to dependent children under age 18 but limited to Roth IRAs.
Roth IRA contributions are available for households who, in 2026 have Modified Adjusted Gross Incomes of:
Less than $242,000, full $7,000 a year contribution is permitted,
That would have avoided ALL deficit spending for at least 41 years (until the first child currently under age 18 reaches age 59 1/2). And, it would have limited contributions to those households who are low- or middle class, up to the 90th percentile in household income.
With respect to each of your concerns, here's my thoughts - keep or pitch - need two notes to respond:
In response to: CHILD TRUST FUNDS Undermine the Dignity of Work:
Not in the least. Each of my children has had a "Ben Franklin" Account since birth. That $1,000 I deposit at birth has grown (they are now ages 41 and 38), but, won't the accumulated assets aren't sufficient to enable them to forego work for another decade or more to come. Not a chance that it deligitimizes wage income.
In terms of income from ownership of assets or capital, that is one goal embraced by many past Administrations - Democrat and Republican - if only via Employee Stock Ownership Plans, as well as equity ownership via retirement plans, retirement savings plans, IRAs, etc.
The Trump Accounts are, for all intents and purposes, a unique form of Individual Retirement Account. I say, take a page out of Ben Franklin's book on long term investing. For America's 250 year anniversary, read Mike Meyer's recent book: Benjamin Franklin's Last Bet: The Favorite Founder’s Divisive Death, Enduring Afterlife, and Blueprint for American Prosperity.
And, of course, money is fungible, so, these monies allow the individual to use other earnings and assets (or debt financing) to add skills, purchase a home, etc.
A middle-class standard of living has historically been defined not solely by wage income but the accumulation of assets, insurance protection, etc. Many think of financial wellness or financial resiliency in terms once defined by the Consumer Financial Protection Board.
The Consumer Financial Protection Bureau (CFPB) defines financial well-being as a state of being wherein a person can fully meet current and ongoing financial obligations, feel secure in their financial future, and make choices that allow them to enjoy life.
And, a middle class standard of living in retirement has historically been defined by a balance of income and wealth known as the three legged stool. Trump Accounts, done right, can clearly assist in providing part of or all of one or two of the legs.
Nothing wrong with what you denote as a "get rich quick" scheme that only blossoms after 50, 60 or 70 years.
In response to: CHILD TRUST FUNDS Incentivize Illegal Immigration.
You state: "Assuming that the Supreme Court rejects the Trump administration’s argument against “birthright citizenship” and upholds the traditional interpretation, Trump Accounts create a major new incentive to get across the border and are likely to prompt a massive expansion of the already large birth tourism industry that brings pregnant foreign nationals to the U.S. to give birth to American citizen babies."
Well, sounds like long past time to enforce our immigration laws, no?
During the 2025 fiscal year, the U.S. Border Patrol recorded 237,538 encounters with migrants at the U.S.-Mexico border. This marked an 87% drop from recent averages and the lowest recorded figure since 1970. In the 2025 fiscal year, there were 8,280 total U.S. Border Patrol apprehensions at the Northern border.
Sounds like a good start.
For comparison, approximately 250,000 to 300,000 babies are estimated to be born annually to unauthorized immigrant mothers in the United States. These births represent nearly 10% of all babies born nationwide, with the majority of these newborns automatically acquiring U.S. citizenship under the Fourteenth Amendment. So, for 2025 - 2028 300,000 * 1,000 = $300 Million!
Sounds like long past time to deport those who are not here legally.
In response to: CHILD TRUST FUND Amounts Are Too Small to Make a Difference to Most People or to Reduce Wealth and Income Inequality.
You state: "... without additional funds from parents, parents’ employers, or philanthropy, by age 18 the account would grow only to an estimated $5,389. Chump change. ..."
Agree, however, which is it, do the accounts undermine the dignity of work, or are they too small to make a difference?
I'll asccept your criticism if you can show me your complaints from years gone by with respect to Child Savings Accounts, like:
- Maine: The Alfond Scholarship Foundation
- Illinois, Nebraska, Pennsylvania, and Rhode Island: 529 accounts with seed deposits.
- Nevada: The College Kickstart program
- Connecticut and Washington D.C.: Both offer state-sponsored "baby bonds" that dedicate trust funds to eligible low-income children for wealth-building.
I agree that failure to make additional contributions beyond the $1,000 seed will result in an account that is "chump change". But, again, anyone can make a contribution, parents, siblings, grandparents, government entities, NGOs, charities, and like Ben Franklin, folks the child has never met and will never meet (Michael Dell, and many others: atr.org/trumpaccounts)
And, of course, we are on the cusp of the greatest wealth transfer in history, why not pass it along to something that is a long term investment, instead of having the beneficieries take it in cash and spend it today. The "Great Wealth Transfer" is a historic, multi-decade event where aging Baby Boomers and the Silent Generation will pass down an estimated $84 to $124 trillion in assets to younger generations and charities by 2045–2048. This unprecedented shift will predominantly benefit Gen X, Millennials, and Gen Z.
Wrong answer, why not pass it along to Generation Alpha, born between 2010 and 2024, and Generation Beta, born in 2025+!
Looking over the comments below, seems there is some confusion between Trump Accouns (for children) and the Trump Administration's attempt to leverage President Biden's change to the Savers Credit into the Savers Match via encouraging enrollment in IRAs.
Well, with respect to Trump Accounts for children under age 18, I say: Trump is no Franklin, But!
See the results of the "Ben Franklin Accounts" I opened up for my son and daughter at birth in 1984 and 1987 - investing in growth tax-deferred investments (initially in Uniform Gifts to Minor's Act accounts funded with tax deferred annuities, later, moving the money to Roth IRAs).
Both are still on track where that initial $1,000 contribution will grow to EXCEED $1MM by their 60th birthday!
Of course, it could all be derailed by sequence of returns risk, and, no one knows what $1MM will buy in 2044 or 2047.
But, kep in mind that only 2% to 5% of American adults have $1 million or more in strictly liquid or investable cash and securities (excluding real estate). This represents roughly 6 to 7 million U.S. households.
So, even if the percentage doubles to 10% or quadruples to 20%, I know which group I want my children to be in. They may be 60 in 2044 or 2047, but they'll always be my children.
(Unfortunately, I have no grandchildren)
People who have children are optimists, about their child, grandchildren, great-grandchildren, and like Ben Franklin, hey are optimists about America's future, too!
We are on the cusp of the greatest wealth transfer in America's history. If you have children, grandchildren or great grandchildren, consider inter vivos gifts today, in 2026 to Trump Accounts or to a 529.
If you are a plan sponsor/employer, the DOL just clarified that Trump Account pre-tax contributions via a cafeteria plan are not subject to ERISA - a la pre-tax contributions to Health Savings Accounts. While discrimination rules still apply (existing cafeteria plan rules and rules similar to Dependent Day Care Health Flexible Spending Accounts), that will address a little of the concerns about wealth inequality. So, please be sure to add that capability via your cafeteria plan for your non-highly compensated employees. Git 'er done in 2026 - don't miss out!
If the only reason you aren't pursuing this opportunity for a child under age 18 in 2026 is because the account is named "Trump", no one says you can't rename it whatever you want. How about a 530A account, or my preference, a Ben Franklin Account ...
A rarely mentioned downside of proposals such as this and “privatization” of Social Security accounts is that artificially directing more money into capital markets will have the effect of reducing the rate of return in accordance with the economic principle of diminishing marginal returns. And it will also tend to raise interest rates, especially on Treasury
securities, as more borrowing becomes necessary to pay for the added outlays from government funds. Another example of the no free lunch principle.
We need to force people to save more for retirement…the best way to do it is just give them money at birth. At no point have I ever thought—18 year olds need more cash completely disconnected from work!! Although if I owned a tattoo parlor or was a drug dealer or bar owner that served minors I might think otherwise! 😉
We need to provide both better means and incentives for young people—especially those in low income communities—to earn enough money over the course of their lives to finance their own retirement while also helping others. The incentives need to come from their own families and communities at an early age, with the government helping by providing public education (including vouchers) better tailored to the aptitude of the individual.
Anyone who is earning a paycheck is “saving “ in the form of contributions to Social Security or a pension fund, which is fine. Those who have low incomes pay no income taxes and receive many other benefits such as the earned income tax credit and Medicaid. Those are also fine. But enough is enough. A reason why many people don’t have savings is that they are living beyond their means in terms of excessive expenditures on things like vehicles, housing and entertainment, including alcohol and drugs. Personal responsibility matters for individuals and society overall.
No, making sure the elderly have enough money in retirement is more important than your moralizing. Trump is already funding the perfect vehicle to supplement SS to go with Biden’s Savers Match. The extra revenue we would raise on the back end to strengthen Medicare and to reduce the deficit is a bonus!
For the benefit of any open minded people who may be following this discussion, is your idea of “moralizing” to acknowledge and support the many existing public policies that benefit lower income people with taxes on higher income people, or to acknowledge the importance of personal responsibility in financial and cultural practices by lower income people (along with everyone else)?
And how do you think that the social/ economic principle of a “contract between generations” applies here?
Trump Accounts and Biden’s Saver’s Match are slowly getting to the optimal way to get Americans to save more for retirement. Bush’s Social Security privatization was the dumbest proposal ever because SS works fine and the reform would just have been a windfall for Bush’s donors in the financial services sector but led to chump change for individuals.
The biggest problem with Trump Accounts is that they aren’t necessarily for retirement and so the very people that need to save more for retirement will spend these dollars on dumb things like tattoos if given unfettered access to accounts at 20 years old…or in the worst case scenario the beneficiaries will buy guns and drugs which is what just happened with upwards $250 billion in PPP fraud. The PPP fraud had catastrophic consequences as seen in a violent crime spike and 100k fentanyl ODs a year from 2020 through 2023. Unfortunately Manchin conflated PPP fraud with the expanded Child Tax Credit which lifted many parents out of poverty and increased standard of living while decreasing debt as a percentage of GDP in 2022.
Young people from poverty should have access to cheap loans other than student loans but you can’t allow criminals to get their hands on free dollars because they will use the dollars to expand their criminal enterprise. So any free dollars given to people in their 20s must be associated with their baby or the beneficiary must prove they are in the legitimate economy by having Social Security credits or an honorable discharge or a college degree. Children of wealthy parents shouldn’t be the only 20 year olds with access to cheap loans just like they shouldn’t be the only ones to attend expensive private colleges which we have actually corrected this decade with need blind admissions and using endowment for tuition.
I have ongoing debates with people that are on my-side of the political fence that are determined to keep demanding that the system that supports them being high income and high wealth is fair enough and that the rest just don't work hard enough or make the right decisions, and that is why they are stuck in lower income and wealth.
While certainly there are plenty of lazy people prone to making bad life decisions, my peers of conservative libertarian economic thinking are fooling themselves that we have not gone far passed the time that we can claim we have a well-functioning democratic capitalist system. What we have today is a globalist corporatist system... maybe a global corporatocracy. It is powered by Wall Street, and it is focused almost exclusively on wealth creation for the top 10% from higher investment returns and higher corporate profit... and the expense of almost everything else.
We need massive new rules to stop the corporate consolidation that is killing competition and cutting out too many people from access to the real economy.
I think Trump Accounts are a good example of much that is wrong with our economy and our country: it’s a program that is unserious, nonsensical, mostly sloganeering, and where the benefits mostly accrue for many years primarily to the wealthy.
Sure, let’s have yet another vehicle to help people save money for the future. That’s fine. But that can be done – and mostly already existed before this latest law. The only new twist here is the government contribution. So let’s focus on that.
Here’s what it is: the federal government prints $1,000 in new money, which is inflationary, and adds it to the existing federal debt. For the rest of history, our children and grandchildren will pay interest to the rich people and governments who buy Treasury bonds to finance this debt.
That new debt is then handed out to a child, and sits for 18 years, further propping up the S&P 500 equity bubble that overwhelmingly benefits the top 25% of Americans (and distorts our economy). Wall St. bankers will generate fees for managing these Trump accounts for 18 years before a child can even touch it.
Then, 18 years from now, the account holder will turn 18, and have perhaps $7,000 in the account handed to them to do whatever they want with. (Of course, these are nominal dollars. Who knows what buying power will remain after inflation continues to do its dirty deed for the next 18 years.) The newly-minted 18 year-old can cash it out immediately by paying a 10% fine, using the remaining $6,300 to pay tuition, put towards the purchase of a car, create the next Tesla, or spend on DraftKings and vape products. There will be some wonderful conflicts in families as Uncle Sam hands a teenager $6,300 cash beyond his or her parents’ legal control.
The simple question that obliterates the Trump Account fantasy is this: if printing $15 billion in new debt over the first 10 years (one program estimate) and dropping it into the S&P 500 in $1,000 increments makes sense, why not print $150 billion – or $15 trillion – and drop it into the stock market?
To even ask the question is considered unkind – why be a killjoy?!?! Printing money today and sending the bill to future Americans is THE AMERICAN WAY!
But someone has to speak truth to nonsense. Printing money and stuffing it into the stock market does NOT generate wealth, even if no one has the cojones to admit it. But it sure helps the wealthy and rich keep the bubble bubbling.
A total scam. Conservatives should admit it. And maybe they will, once they get done talking about our great new victory over Iran.
How much would the accounts be worth if they can’t be touched for 65 years? And remember they can be combined with Biden’s Savers Match. I would also tax this money very progressively after 65 so that these accounts get everyone to essentially max SS benefits AND allow for higher Medicare premiums and copays with Obamacare CSRs (very progressive). So wealthy people’s accounts would essentially be taxed at 100% but would still be there if they somehow went bankrupt at 70. The lump sum at death would also be taxed progressively.
A whole lot of nominal dollars. But that's irrelevant unless the magic math is real. And if the magic math is real, then we should print trillions of dollars and put it in the S&P 500. Unfortunately, printing money and throwing it in the stock market does not create wealth. It creates more inflation, more federal debt (every grand given away is added to the debt forever), more interest paid to already rich holders of Treasuries, and more fees for already-rich bankers.
No, getting everyone invested in the stock market now with both parties more focused on workers is the best time to get everyone invested in the stock market. The S&P 500 has a literal 100 year track record and in fact its worst performance was during Bush/Cheney which was the administration that was by far most beholden to corporate interests…so corporations should know a president looking out for them is bad economics!!
So maximizing shareholder value with presidents like Obama and Biden and Clinton (and to a lesser degree but still positive Trump) would be good for working Americans because it’s the most obvious way to get 10% returns for all Americans and more retirement savings!! And guess how we could pay for it? Have corporate America pick up the $4 billion a year or just keep paying for it with deficit spending!
Btw, I even support Rubio’s maternity program paid for by SS because it gets mothers cash and we have 40 years to rescind the hit the mother’s SS payments. So unless you have a quicker way to get mothers cash then we should go with Rubio’s solution.
A very helpful comment - thank you!
It’s a stupid idea. Just contributing $1,000 to a 529 account would be more useful. How many of those accounts will have just the original $1,000 plus gains, if any, when the child turns 18. We already have ways to do what these accounts purport to do. Trump just wants his name on something. Screw that.
Nice idea in theory. But unless we get people out of actual poverty, most of this will be consumed as soon as the beneficiaries turn 18. The people pushing this have never studied economics, particularly behavioral economics, sociology, psychology etc. Bet.
This is just another proposal to make poor and lower middle class people think that the current administration cares about them. It is in the same category as lowering taxes on Social Security (which does not help the poor because most are not paying taxes on this income) and "no tax on tips". Meanwhile the federal deficit is growing rapidly and income tax dodges for the risk go untouched. How about taxing investment income the same as labor income? How about dealing with our very high overhead health insurance system. This is just a diversion and not a good one.
The poor will often put this money in a savings account or a high-risk equity investment with big time fees.
This is actually not a bad idea. I went looking for things like maybe contributions are deductions like the IRA, nope. Makes it more fair for lower income. Also looked for withdrawals for emergencies like dad's beer fund. Nope. I went looking for bad parts, and found none.
Every poor mom in America dreams of good things for their kids. Especially during infancy, toddler, and pre puberty. All the time before they drive you to the poor house. Moms would put money in these accounts. With compounding the money adds up.
I have a real hard time even convincing adults to invest. They think it's complicated, it's not. Knowing how to manage your own money can change one's life
Now do dads. I predict in 20 years we see a boom in tattoos along with street gun price inflation along with more drugs being bought and sold.
This is the greatest idea in recent memory. If you understand behavioral economics at all, giving every American kid a nudge towards capitalism vs socialism (becoming popular along younger generations) is worth every penny for the healthy as well as prosperity of a democratic free market based economy. Instead of brain washing our kids with left-wing ideology and teaching them to hate the founders and older generations, how about lowering the barrier to entry for a personal laboratory to experiment with capitalism? It’s not a magic bullet - there is none on planet Earth - but it’s money well spent for the common wealth of humanity.
Continued, repeated from a prior post:
In response to: Government Imposes Restrictions on How Child Trust Fund Money Can Be Spent
Nope. Simply, nope. Once a child reaches age 18, they can spend trust or custodial account money on absolutely anything they want. Because they legally gain total ownership and control, they are not restricted to just educational or medical expenses and can freely use the funds for living expenses, vehicles, travel, or investments.
In Response to: Child Trust Funds Are Used as Excuses to Cut or Eliminate More Efficient and Fair Public Programs
Which ones were eliminated in favor of Trump Accounts?
I agree, that should they be a success, our Democratic and Republican Congressional idiots of the future may decide, after Social Security celebrates its 100+ anniversary, to remake Social Security into a welfare, means-tested program.
You state: "... Trump Account supporters proudly frame them as a stealth form of Social Security privatization. ..." I agree, leading Republicans, including Sen. Ted Cruz and Treasury Secretary Scott Bessent, have referred to these accounts as a "backdoor" or "dirty little secret" toward achieving long-held conservative goals of privatizing Social Security. The concept relies on the idea that shifting government contributions into stock market-invested accounts accustoms the public to personal retirement investing rather than relying solely on traditional, government-funded safety nets.
However, that's won't affect Social Security or Medicare benefits unless Congress acts. It will likely impact funding of Medicare Part B and D (including IRMAA, Health Reform's Net Investment Income Tax (NIIT), etc.)
However, unless Trump Accounts are universal with significant accumulations (highly unlikely to be widespread, even less likely not to be spent between ages 18 - 62), fat chance they will become a "backdoor" for privatized investment of Social Security monies.
In response to: "... To the five congenital flaws of all mainstream child trust fund proposals, the Trump administration and Republicans in Congress have added a sixth—Trump Accounts are incredibly, unbelievably, grotesquely regressive. ..."
Sorry, that's like arguing the Individual Retirement Account, added by a super majority Democratic Congress in 1974, and touted by 23+ mostly Democratic run state legislatures in their Roth IRA initiatives, is "unbelievably, grotesquely regressive". Here's what some of thosse Democratic Governors had to say about their Roth IRA mandates:
California Governor Gavin Newsom famously praised the state's CalSavers retirement program as a way to "level the playing field for millions of Californians" who would otherwise lack access to a workplace retirement plan.
Connecticut Governor Ned Lamont championed the MyCTSavings program as a way to offer hardworking residents "a smart new way to make investments for their futures."
Governor Wes Moore emphasizes that the MarylandSaves program provides a "pathway to... wealth for every family in Maryland" and ensures that "Marylanders who work hard are rewarded"
Aborting Trump Accounts before they are born makes little sense. If, in fact, your fears come to pass, remember that the federal government support for the program in the form of a $1,000 contribution doesn't apply to those born after December 31, 2028. And, Congress can amend IRC 125 at any time to remove that tax preference (even though the Administratoin has yet to confirm/finalize non-discrimination tests under IRC 125 and IRC 129).
However, while the the next President and her/his Administration may not favor extending the $1,000 credit, everyone will be surprised to see revocation of the Trump Accounts.
I suspect you aren't enamored with Trump Accounts in part because of the name. How about we rename them as 530A Accounts. Or, feel free to pitch my preferred name: The Ben Franklin Child IRAs.
I posted this elsewhere, same topic, in response to criticism of Trump Accounts:
I too have concerns about Trump Accounts. Top of mind is the decision to provide $1,000, via more deficit spending, sending the bill to taxpayers too young to vote and generations yet unborn.
Instead, I would have replicated the spousal IRA to also apply to dependent children under age 18 but limited to Roth IRAs.
Roth IRA contributions are available for households who, in 2026 have Modified Adjusted Gross Incomes of:
Less than $242,000, full $7,000 a year contribution is permitted,
$242,000 – $251,999, prorated $7,000 contribution,
$252,000+, no contribution.
That would have avoided ALL deficit spending for at least 41 years (until the first child currently under age 18 reaches age 59 1/2). And, it would have limited contributions to those households who are low- or middle class, up to the 90th percentile in household income.
With respect to each of your concerns, here's my thoughts - keep or pitch - need two notes to respond:
In response to: CHILD TRUST FUNDS Undermine the Dignity of Work:
Not in the least. Each of my children has had a "Ben Franklin" Account since birth. That $1,000 I deposit at birth has grown (they are now ages 41 and 38), but, won't the accumulated assets aren't sufficient to enable them to forego work for another decade or more to come. Not a chance that it deligitimizes wage income.
In terms of income from ownership of assets or capital, that is one goal embraced by many past Administrations - Democrat and Republican - if only via Employee Stock Ownership Plans, as well as equity ownership via retirement plans, retirement savings plans, IRAs, etc.
The Trump Accounts are, for all intents and purposes, a unique form of Individual Retirement Account. I say, take a page out of Ben Franklin's book on long term investing. For America's 250 year anniversary, read Mike Meyer's recent book: Benjamin Franklin's Last Bet: The Favorite Founder’s Divisive Death, Enduring Afterlife, and Blueprint for American Prosperity.
And, of course, money is fungible, so, these monies allow the individual to use other earnings and assets (or debt financing) to add skills, purchase a home, etc.
A middle-class standard of living has historically been defined not solely by wage income but the accumulation of assets, insurance protection, etc. Many think of financial wellness or financial resiliency in terms once defined by the Consumer Financial Protection Board.
The Consumer Financial Protection Bureau (CFPB) defines financial well-being as a state of being wherein a person can fully meet current and ongoing financial obligations, feel secure in their financial future, and make choices that allow them to enjoy life.
And, a middle class standard of living in retirement has historically been defined by a balance of income and wealth known as the three legged stool. Trump Accounts, done right, can clearly assist in providing part of or all of one or two of the legs.
Nothing wrong with what you denote as a "get rich quick" scheme that only blossoms after 50, 60 or 70 years.
In response to: CHILD TRUST FUNDS Incentivize Illegal Immigration.
You state: "Assuming that the Supreme Court rejects the Trump administration’s argument against “birthright citizenship” and upholds the traditional interpretation, Trump Accounts create a major new incentive to get across the border and are likely to prompt a massive expansion of the already large birth tourism industry that brings pregnant foreign nationals to the U.S. to give birth to American citizen babies."
Well, sounds like long past time to enforce our immigration laws, no?
During the 2025 fiscal year, the U.S. Border Patrol recorded 237,538 encounters with migrants at the U.S.-Mexico border. This marked an 87% drop from recent averages and the lowest recorded figure since 1970. In the 2025 fiscal year, there were 8,280 total U.S. Border Patrol apprehensions at the Northern border.
Sounds like a good start.
For comparison, approximately 250,000 to 300,000 babies are estimated to be born annually to unauthorized immigrant mothers in the United States. These births represent nearly 10% of all babies born nationwide, with the majority of these newborns automatically acquiring U.S. citizenship under the Fourteenth Amendment. So, for 2025 - 2028 300,000 * 1,000 = $300 Million!
Sounds like long past time to deport those who are not here legally.
In response to: CHILD TRUST FUND Amounts Are Too Small to Make a Difference to Most People or to Reduce Wealth and Income Inequality.
You state: "... without additional funds from parents, parents’ employers, or philanthropy, by age 18 the account would grow only to an estimated $5,389. Chump change. ..."
Agree, however, which is it, do the accounts undermine the dignity of work, or are they too small to make a difference?
I'll asccept your criticism if you can show me your complaints from years gone by with respect to Child Savings Accounts, like:
- Maine: The Alfond Scholarship Foundation
- Illinois, Nebraska, Pennsylvania, and Rhode Island: 529 accounts with seed deposits.
- Nevada: The College Kickstart program
- Connecticut and Washington D.C.: Both offer state-sponsored "baby bonds" that dedicate trust funds to eligible low-income children for wealth-building.
I agree that failure to make additional contributions beyond the $1,000 seed will result in an account that is "chump change". But, again, anyone can make a contribution, parents, siblings, grandparents, government entities, NGOs, charities, and like Ben Franklin, folks the child has never met and will never meet (Michael Dell, and many others: atr.org/trumpaccounts)
And, of course, we are on the cusp of the greatest wealth transfer in history, why not pass it along to something that is a long term investment, instead of having the beneficieries take it in cash and spend it today. The "Great Wealth Transfer" is a historic, multi-decade event where aging Baby Boomers and the Silent Generation will pass down an estimated $84 to $124 trillion in assets to younger generations and charities by 2045–2048. This unprecedented shift will predominantly benefit Gen X, Millennials, and Gen Z.
Wrong answer, why not pass it along to Generation Alpha, born between 2010 and 2024, and Generation Beta, born in 2025+!
Go Ray Go!!!!!!
Looking over the comments below, seems there is some confusion between Trump Accouns (for children) and the Trump Administration's attempt to leverage President Biden's change to the Savers Credit into the Savers Match via encouraging enrollment in IRAs.
Well, with respect to Trump Accounts for children under age 18, I say: Trump is no Franklin, But!
https://401kspecialistmag.com/trump-is-no-franklin-but/
$1,000 at birth ain't nothing.
See the results of the "Ben Franklin Accounts" I opened up for my son and daughter at birth in 1984 and 1987 - investing in growth tax-deferred investments (initially in Uniform Gifts to Minor's Act accounts funded with tax deferred annuities, later, moving the money to Roth IRAs).
Both are still on track where that initial $1,000 contribution will grow to EXCEED $1MM by their 60th birthday!
Of course, it could all be derailed by sequence of returns risk, and, no one knows what $1MM will buy in 2044 or 2047.
But, kep in mind that only 2% to 5% of American adults have $1 million or more in strictly liquid or investable cash and securities (excluding real estate). This represents roughly 6 to 7 million U.S. households.
So, even if the percentage doubles to 10% or quadruples to 20%, I know which group I want my children to be in. They may be 60 in 2044 or 2047, but they'll always be my children.
(Unfortunately, I have no grandchildren)
People who have children are optimists, about their child, grandchildren, great-grandchildren, and like Ben Franklin, hey are optimists about America's future, too!
We are on the cusp of the greatest wealth transfer in America's history. If you have children, grandchildren or great grandchildren, consider inter vivos gifts today, in 2026 to Trump Accounts or to a 529.
If you are a plan sponsor/employer, the DOL just clarified that Trump Account pre-tax contributions via a cafeteria plan are not subject to ERISA - a la pre-tax contributions to Health Savings Accounts. While discrimination rules still apply (existing cafeteria plan rules and rules similar to Dependent Day Care Health Flexible Spending Accounts), that will address a little of the concerns about wealth inequality. So, please be sure to add that capability via your cafeteria plan for your non-highly compensated employees. Git 'er done in 2026 - don't miss out!
If the only reason you aren't pursuing this opportunity for a child under age 18 in 2026 is because the account is named "Trump", no one says you can't rename it whatever you want. How about a 530A account, or my preference, a Ben Franklin Account ...
https://401kspecialistmag.com/let-ben-franklin-create-middle-class-millionaires-eradicate-poverty-in-america/
Let's Go!
A rarely mentioned downside of proposals such as this and “privatization” of Social Security accounts is that artificially directing more money into capital markets will have the effect of reducing the rate of return in accordance with the economic principle of diminishing marginal returns. And it will also tend to raise interest rates, especially on Treasury
securities, as more borrowing becomes necessary to pay for the added outlays from government funds. Another example of the no free lunch principle.
We need to force people to save more for retirement…the best way to do it is just give them money at birth. At no point have I ever thought—18 year olds need more cash completely disconnected from work!! Although if I owned a tattoo parlor or was a drug dealer or bar owner that served minors I might think otherwise! 😉
We need to provide both better means and incentives for young people—especially those in low income communities—to earn enough money over the course of their lives to finance their own retirement while also helping others. The incentives need to come from their own families and communities at an early age, with the government helping by providing public education (including vouchers) better tailored to the aptitude of the individual.
Biden did that with Saver’s Match…incentives to save more have never worked with people that live paycheck to paycheck.
Anyone who is earning a paycheck is “saving “ in the form of contributions to Social Security or a pension fund, which is fine. Those who have low incomes pay no income taxes and receive many other benefits such as the earned income tax credit and Medicaid. Those are also fine. But enough is enough. A reason why many people don’t have savings is that they are living beyond their means in terms of excessive expenditures on things like vehicles, housing and entertainment, including alcohol and drugs. Personal responsibility matters for individuals and society overall.
No, making sure the elderly have enough money in retirement is more important than your moralizing. Trump is already funding the perfect vehicle to supplement SS to go with Biden’s Savers Match. The extra revenue we would raise on the back end to strengthen Medicare and to reduce the deficit is a bonus!
For the benefit of any open minded people who may be following this discussion, is your idea of “moralizing” to acknowledge and support the many existing public policies that benefit lower income people with taxes on higher income people, or to acknowledge the importance of personal responsibility in financial and cultural practices by lower income people (along with everyone else)?
And how do you think that the social/ economic principle of a “contract between generations” applies here?
Trump Accounts and Biden’s Saver’s Match are slowly getting to the optimal way to get Americans to save more for retirement. Bush’s Social Security privatization was the dumbest proposal ever because SS works fine and the reform would just have been a windfall for Bush’s donors in the financial services sector but led to chump change for individuals.
The biggest problem with Trump Accounts is that they aren’t necessarily for retirement and so the very people that need to save more for retirement will spend these dollars on dumb things like tattoos if given unfettered access to accounts at 20 years old…or in the worst case scenario the beneficiaries will buy guns and drugs which is what just happened with upwards $250 billion in PPP fraud. The PPP fraud had catastrophic consequences as seen in a violent crime spike and 100k fentanyl ODs a year from 2020 through 2023. Unfortunately Manchin conflated PPP fraud with the expanded Child Tax Credit which lifted many parents out of poverty and increased standard of living while decreasing debt as a percentage of GDP in 2022.
Young people from poverty should have access to cheap loans other than student loans but you can’t allow criminals to get their hands on free dollars because they will use the dollars to expand their criminal enterprise. So any free dollars given to people in their 20s must be associated with their baby or the beneficiary must prove they are in the legitimate economy by having Social Security credits or an honorable discharge or a college degree. Children of wealthy parents shouldn’t be the only 20 year olds with access to cheap loans just like they shouldn’t be the only ones to attend expensive private colleges which we have actually corrected this decade with need blind admissions and using endowment for tuition.