Looking at Uncle Sam’s books, the future is bleak for children born today. As soon as they come out of the womb, kids are immediately on the hook for the previous generations’ fiscal recklessness. However, it is not all doom and gloom, as the prospect of Trump Accounts could be a saving grace for America’s youth, at least for those born within a specific time frame.
Trump Accounts for Kids
During an affordability and pro-family pitch in Washington earlier this week, President Donald Trump touted his Trump Accounts. “Decades from now, I believe the Trump accounts will be remembered as one of the most transformative policy innovations of all time,” Trump stated.
A parent, guardian, adult sibling, or grandparent with a valid Social Security number may open an account on a child’s behalf. While contributions are voluntary, families may add up to $5,000 per year to each account. Assets will be invested in diversified US equity index funds designed to track the broader stock market.
The Treasury Department estimates that one seed money deposit can grow to $500,000 “with average returns” by the time the person turns 60. In “strong markets,” the $1,000 could become $1 million. And this is not adjusted for inflation.
Scores of businesses and affluent individuals are hopping on the bandwagon and matching the government’s $1,000 contributions. The latest included the Bank of America, JPMorgan Chase, and Steak ‘n Shake. But many others have made commitments, including Michael and Susan Dell, BlackRock, Robinhood, and rapper Nicki Minaj.
Babies of Wall Street
Today’s economic system is designed to force households into the stock market and punish savers. A 2% inflation rate, low interest rates, and purchasing power devaluation are byproducts of the current landscape. The only way to survive is to be part of Wall Street and own assets, whether US stocks, precious metals, or cryptocurrencies.
Since the coronavirus pandemic, it has been a running of the bulls in the US stock market, though they faced a nine-month war with the bears in 2022. Nearly everything is at a record high. Some say this is a bubble fueled by the Federal Reserve. Others argue the fundamentals support current valuations. Whatever the case, parking cash in a savings account erodes your wealth. As a result, even tepid exposure, especially at a young age, can inevitably lead to a handsome sum in the coming decades.
Skeptics might contend that this could be construed as a bailout for Wall Street. While there has not been an official estimate, economists have projected that the price tag for this program could be about $15 billion over the four-year window. By comparison, approximately $500 billion flows through US stock exchanges during a typical trading session.
Suffice it to say, $15 billion is peanuts, chicken feed, a fistful of bupkis.
Red Ink
A child born on September 5, 2025, is already behind the eight ball, slapped with an IOU. Social Security is on the cusp of bankruptcy. Each citizen’s share of the national debt is $113,000. The dollar has lost virtually all its buying power. Will Trump Accounts be the child’s lottery ticket or retirement nest egg? The US stock market has seen its share of crashes and selloffs, but they are followed by historic rallies.
