Trump Accounts: A Dirty Little Scheme That May Save Capitalism From Its Own Children

 

Trump’s $1,000 baby accounts look like political vanity, but they expose a terrifying truth: capitalism cannot survive if millions of young people own nothing and increasingly dream of socialism.

I will give Donald Trump two cheers for Trump Accounts. Not 3. Let us not get drunk at the bar before the first round is finished. The scheme is partisan, politically branded, financed by borrowed money, and wrapped in the kind of presidential vanity that has become as predictable as sunrise. But underneath the gold lettering, political perfume, and billionaire fingerprints lies something America desperately needs: a way to give ordinary children a real stake in capitalism before they grow up believing capitalism is merely a casino where the rich own the tables, write the rules, hire the dealers, and send everyone else the bill.

That is why I refuse to dismiss Trump Accounts as another Washington gimmick. The execution is grubby. The core idea is not. Babies born between 2025 and 2028 can receive $1,000 invested in a diversified fund tracking American stocks, with the money generally locked away until age 18. Parents and others can add more. Employers and philanthropists can contribute too. The federal government is planting a small financial seed in the soil of American capitalism and telling a child, “This piece is yours.”

Good. About time.

But let us call a spade a spade. Naming these accounts after Trump is political branding with a diaper on. Why should a national investment program for American children carry the name of a sitting president? America does not belong to Trump, Democrats, Republicans, billionaires, or the loudest mob on social media. If the idea is truly national, it should survive elections, presidencies, and partisan tantrums. A child born in Baltimore, Detroit, rural Kentucky, or the Bronx should not have to wear a political jersey to own a stake in the American economy.

Then there is the ugly cutoff. A baby born in 2025 gets the $1,000 seed investment. A child born in 2024 does not. Same country. Same flag. Same economy. Different birthday. Tough luck, kid. You arrived at the wrong political moment.

That is arbitrary. It is also classic Washington. Politicians love drawing lines and pretending those lines came down from Mount Sinai.

Still, I see something bigger hiding beneath the mud. America has spent decades preaching capitalism to children who increasingly experience it as spectators. We tell them to work hard. We tell them to save. We tell them America is the land of opportunity. Then many turn 18 with no stocks, no house, no serious savings, and no meaningful ownership of productive capital. Meanwhile, children born into wealthy families may receive investment accounts, college funds, inheritances, down-payment help, business connections, and a financial parachute packed by Mom and Dad.

Then we look at the poor kid and say, “Run faster.”

What a joke.

The Federal Reserve's 2022 Survey of Consumer Finances showed just how wide America's ownership gap remains. The wealthiest 10% of families owned 93% of stocks, while the bottom 50% owned only 1%. That is not some socialist pamphlet printed in a basement. That is the Federal Reserve describing the American economy. When ownership is concentrated that heavily, politicians should not be shocked when young people begin asking whether the game is rigged. If millions of young Americans see capitalism only as rent bills, student debt, expensive groceries, impossible home prices, and billionaire rocket launches, they will eventually ask the obvious question: “Where exactly is my share?”

Trump Accounts offer a small answer.

The $1,000 is not a fortune. Nobody should start measuring the curtains for a mansion. If it grows to roughly $4,500 by age 18, inflation may reduce its real value to around $3,000 in today's money. That will not buy a house in Baltimore, Boston, or Boise. It may not even cover a semester of tuition at many universities. But $3,000 is not nothing to an 18-year-old from a poor family. It can help buy a used car, pay part of a security deposit, cover training costs, reduce education expenses, or provide the first capital for a small business.

More importantly, the account could teach a lesson that schools often fail miserably to teach: money can work.

Imagine a 10-year-old opening a statement with her mother.

“Mom, why did my account go up?”

“Because you own stocks.”

“What are stocks?”

“Pieces of companies.”

“So I own part of American companies?”

“Yes.”

Now capitalism is no longer a dusty chapter in an economics textbook. It has a pulse. It has a number. It rises. It falls. It compounds. The child has skin in the game.

That matters because compound growth is one of the quietest wealth machines ever invented. If $1,000 grows at an average annual rate of 8%, it becomes about $4,000 after 18 years without another cent being added. Add regular family contributions, employer contributions, or philanthropic gifts, and the numbers become much more interesting. Time does the heavy lifting while the child is still learning multiplication tables.

History suggests that broadening asset ownership can change lives and politics. The United Kingdom's Child Trust Fund, introduced for children born between September 2002 and January 2011, gave eligible children tax-free savings accounts with government starter payments. Millions of accounts were created. When the first generation reached adulthood in 2020, those young people gained access to actual financial assets. The program was imperfect, and many account holders initially failed to claim their money, but the basic principle was clear: birth should not automatically mean starting economic life with empty pockets.

America has its own historical evidence. The rise of 401(k) retirement accounts, individual retirement accounts, mutual funds, and defined-contribution plans helped turn tens of millions of workers into investors. According to Federal Reserve data, 58% of American families held stocks directly or indirectly in 2022, a record high at the time. Capital ownership, once viewed as the private club of Wall Street aristocrats, became more widespread.

But widespread does not mean equal. Not even close.

That is where Trump Accounts become more than a cute gift for newborns. They could become a small weapon against what I consider one of the most dangerous political trends in America: a generation losing faith in capitalism because too many young people feel capitalism has no faith in them.

The attraction of socialism among younger Americans did not fall from the sky. It grew from lived experience. Many entered adulthood after the 2008 financial crisis. They watched banks receive bailouts while families lost homes. They watched housing prices climb. They watched student debt explode. They watched billionaires become richer during crises. Then the political class acted shocked when young people started flirting with socialism.

Come on.

You cannot lock people outside the restaurant, let them smell the steak, and then lecture them about the beauty of the menu. If America wants young people to defend free enterprise, America should give more of them something worth defending. A person who owns stocks sees corporate profits differently from someone who owns nothing but bills. A teenager watching an index fund grow begins to understand dividends, risk, volatility, patience, and compound returns. Ownership changes the conversation.

And then comes artificial intelligence, the elephant in the server room.

AI could make Trump Accounts far more important than their creators may realize. The economic danger is simple. If AI allows a relatively small group of companies, founders, shareholders, and investors to capture enormous profits while displacing or weakening millions of workers, America could face an explosive political crisis. Capital could feast while labor fights over crumbs.

We do not know whether the most radical predictions will come true. Anyone claiming certainty is selling snake oil with a computer chip inside the bottle. But the risk is serious enough to deserve attention. Goldman Sachs estimated in 2023 that generative AI could expose the equivalent of 300 million full-time jobs worldwide to automation. The International Monetary Fund later estimated that nearly 40% of jobs worldwide could be affected by AI, with exposure reaching about 60% in advanced economies.

Those figures do not mean 300 million people will necessarily lose their jobs. They mean disruption could be enormous. And if the machines produce the wealth while a narrow group owns the machines, we may discover that capitalism has built a political bomb and forgotten where it put the detonator.

That is why citizen ownership deserves serious attention.

Suppose AI companies become spectacularly profitable. Suppose a small fraction of equity in major AI firms is voluntarily donated or transferred into national citizen investment accounts. Suppose every child owns a tiny piece of the productivity revolution from birth. Instead of merely hearing that AI is coming for jobs, families could also see AI-related wealth flowing into their investment accounts.

That would not solve every problem. But it would change the politics of the problem.

I would rather see citizens own actual financial assets than watch politicians create another giant bureaucracy to tax, spend, administer, redistribute, investigate, regulate, and eventually drown in paperwork. Government agencies have a remarkable talent for turning a glass of water into a 700-page instruction manual.

Direct ownership is cleaner. Give people assets. Let them watch those assets grow. Teach them what they own. Make capitalism personal.

The billionaire donations surrounding Trump Accounts deserve suspicion. When rich corporations and wealthy donors gather around politicians bearing gifts, I count my fingers after the handshake. Cronyism is not a fantasy in Washington. Money buys access, access creates influence, and influence has a nasty habit of dressing itself as public service.

But philanthropy itself is not the enemy. If billionaires want to contribute money to investment accounts for millions of American children, I will not slam the door because their motives may be mixed. Human motives are almost always mixed. Andrew Carnegie built libraries while fighting brutal labor battles. John D. Rockefeller funded medicine and education after building one of history's most feared monopolies. Billions of philanthropic dollars have done genuine good even when the donors' halos were crooked.

Take the money. Build safeguards. Demand transparency. Keep politicians' relatives away from the cookie jar.

The deficit financing is another blemish. America already carries a federal debt measured in tens of trillions of dollars. Borrowing more money to finance another federal benefit is hardly a profile in courage. Washington borrows the way some people breathe.

Yet there is an important distinction. Most government transfers finance immediate consumption. Trump Accounts finance savings and investment. The money buys productive assets rather than disappearing immediately into today's spending. The estimated fiscal effect, at roughly 0.005% of annual GDP, is microscopic compared with the size of the federal budget and the broader national debt problem.

So I give Trump Accounts two cheers. The first cheer is for ownership. Every American child should have a genuine chance to enter adulthood owning a piece of the productive economy. The second cheer is for experimentation. America should test whether universal child investment accounts can improve financial literacy, broaden stock ownership, soften inherited inequality, and prepare citizens for an AI economy in which capital may become even more powerful.

The missing third cheer is for the politics. The Trump name should eventually go. The arbitrary birth-year limits should go. The crony smell should go. The program should become permanent, universal, transparent, fiscally responsible, and politically neutral. Call them American Opportunity Accounts. Call them Liberty Accounts. Call them Citizen Investment Accounts. Call them anything that does not turn a child's financial future into a campaign bumper sticker.

The irony is delicious. A grubby, partisan scheme carrying the name of one of the most controversial presidents in American history may contain the seed of an idea capable of strengthening capitalism for generations. Politics is funny that way. Sometimes good ideas arrive wearing dirty shoes.

I do not worship Trump Accounts. I do not condemn them either. I see them for what they are: a flawed experiment with a powerful idea buried inside.

Give children capital. Let them own something. Let them watch it grow. Let them learn that capitalism is not merely something billionaires do behind glass towers. Give them a seat, however small, at the table. Because if capitalism refuses to create more capitalists, socialism will gladly create more socialists.

And that is the real warning buried inside these $1,000 accounts. America cannot keep preaching ownership to people who own nothing. Sooner or later, the audience stops listening.

 

This article stands on its own, but some readers may also enjoy the titles in my “Brief Book Series”. Read it here on Google Play or in Barnes & Noble bookstore: Brief Book Series.