Trump Accounts have a bigger problem than billionaire stock donations
·2 min read
Compiled by KHAO Editorial
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Earlier this month, The New York Times reported that White House and Treasury officials have discussed allowing billionaires to donate shares of stock directly into Trump Accounts, the new $1,000 investment accounts created for (most) American children.
Key facts
After 17 years, the initial $1,000 deposit has grown to approximately $2,600 through investment returns alone, and participants hold an average of roughly $5,000 in total 529 college assets
Earlier this month, The New York Times reported that White House and Treasury officials have discussed allowing billionaires to donate shares of stock directly into Trump Accounts, the new $1,000
In the SEED for Oklahoma Kids experiment, the only long-term randomized trial of children’s investment accounts in the United States, the state automatically opened accounts for newborns
When Maine required parents to opt into a similar children’s savings program in 2008, only 40% signed up despite a multimillion-dollar recruitment effort
Summary
Within hours, the proposal’s lead advocate, Brad Gerstner, called the report “misleading,” clarifying that all funds would remain in a diversified index fund, the only option the law currently allows to protect children from the volatility of individual stock picking. The program also lacks the administrative infrastructure to handle it stock donations. That debate, however, is a sideshow. Roughly 6.6 million children are enrolled in Trump Accounts. When Maine required parents to opt into a similar children’s savings program in 2008, only 40% signed up despite a multimillion-dollar recruitment effort.