Carlton Supporters Club

While Australia is bucking the trend of falling interest rates in major nations and raising rates Donald Trump has launched "Trump Accounts". What is it and how does it work?..glad you asked...

Every newborn in the USA will receive US$1,000 from the government, deposited into an investment account, with parents acting as custodians until age 18 (all children under 18 can still establish accounts)
The money is mandated to be invested in US equity ETFs or index funds.
Families, employers and charities can contribute up to US$5,000 per year
Accounts are locked until age 18, at which point funds can be used to buy a home, pay for education, or continue saving for retirement.
Access to the money may be linked to financial literacy requirements.

Now Im not normally a fan of anything Trump says or does but this isnt a bad idea imo. Taking into account inflation and to make the amount of money significant it will require extra contributions every year but it does have merit in encouraging saving and learning about investments and might get a proportion of the population interested enough to participate in a meaningful manner.

Trump Accounts lol. Another piece of political theater. Prices for everything are skyrocketing and wages are in the toilet. Education, healthcare cost of living is sending record numbers into debt, but a few shekels rotting in a bank account will undoubtedly help.

One hand gives f#4k all, and the other hand takes massively.

its right to be cynical.  Those accounts will fuel the stock market, but it will be a boon to people.  I had the benefit of a family with strong ideals on been miserly with money.  We spent infrequently, but enjoyed our lives.  Mum encouraged banking and introduced me to it in when I was sub 8 years old.  This account will do this for people that potentially dont do this.  Its not bad at all, in fact its dead set great particularly as it is the only thing resembling a reverse pension where the populace pay taxes into the next generation, not just borrowing money against them.

Even a broken clock is right twice a day.

There's probably a bit of interest to be collected.

Some random data for those interested :

from 1979-2019, real wages for US workers rose by 17%
from 1979-2019, worker productivity rose by 72%
from 1980-2018, the share of their total spending spent on health doubled.
In 2008, there were 7 states in which the cost of covering your health insurance was 10% or more of the median income. By 2018, that rose to 42 states.
from 1980-2018, the cost of education rose 600% compared to people's incomes. Not a typo.

Bipartisan polices that have cut the US population into 6000 pieces and left it profusely bleeding will not be ameliorated by a band aid.

Yep.

The only US politician I listen to in reference to how the working class is doing in the US is Bernie. Too many working class/lower class/middle class Yanks don't seem to realise how they're being fkd over -- in so many ways -- by the decaying Orange One and his army of sycophants. Republican Party is dead. And let's not talk about the disarray Democrats.

Economists don't seem too impressed with Taco Accounts.

Despite its limited life - children born in the next three years - the US economy simply doesn't have the capacity to fund the direct fiscal cost of over $3 billion per year and the money will most likely have to be borrowed. While these payments are a direct cost to the US government, they are a benefit to the lenders through interest. In other words, the payments and receipts cancel each other out.

However, the $1,000 grant is just a redistribution from taxpayers and lenders to newborns, and is neutral in terms of efficiency. The opportunity costs are not neutral though; when the US government borrows, it issues bonds. The investors who buy those bonds aren't investing that money in other, more critical areas of the economy like infrastructure, health, education, housing, energy, etc.

The affordability crisis means that the vast majority of American families won't be able to make contributions.  Most beneficiaries will receive $1,000 plus 18 years of compound interest and the administration reckons that will be worth $15,000.  The administration calculates that children from families that can afford to invest the maximum will have $742,000.  In other words, "It will make wealth inequality significantly worse, because it favors those who have resources to begin with,” according to David Radcliffe, from The New School’s Institute on Race, Power, and Political Economy.

William Darity, an economist at Duke University, says "Allowing those who are richer to put more in than those who are poor runs counter to any notion that there's any kind of redistributive justice taking place.”  And this is an economy where the bottom 50% of American households hold just 2.5% of the wealth.

Economists don't seem too impressed with Taco Accounts.

Despite its limited life - children born in the next three years - the US economy simply doesn't have the capacity to fund the direct fiscal cost of over $3 billion per year and the money will most likely have to be borrowed. While these payments are a direct cost to the US government, they are a benefit to the lenders through interest. In other words, the payments and receipts cancel each other out.

However, the $1,000 grant is just a redistribution from taxpayers and lenders to newborns, and is neutral in terms of efficiency. The opportunity costs are not neutral though; when the US government borrows, it issues bonds. The investors who buy those bonds aren't investing that money in other, more critical areas of the economy like infrastructure, health, education, housing, energy, etc.

The affordability crisis means that the vast majority of American families won't be able to make contributions.  Most beneficiaries will receive $1,000 plus 18 years of compound interest and the administration reckons that will be worth $15,000.  The administration calculates that children from families that can afford to invest the maximum will have $742,000.  In other words, "It will make wealth inequality significantly worse, because it favors those who have resources to begin with,” according to David Radcliffe, from The New School’s Institute on Race, Power, and Political Economy.

William Darity, an economist at Duke University, says "Allowing those who are richer to put more in than those who are poor runs counter to any notion that there's any kind of redistributive justice taking place.”  And this is an economy where the bottom 50% of American households hold just 2.5% of the wealth.

I cant see wealthy families investing money for their kids in a scheme that invests in ETF's that track the index etc and produces modest returns inline with what the S&P500 returns each year...

If wealthy families won’t invest, it’s dead in the water because most families won’t be able to afford to.