President Donald Trump spent weeks hyping his Trump Accounts for newborns, giving every new baby in the United States $1,000 in seed money that can’t be touched until they turn 18.
You might think that sounds like a great idea, and it probably is for the children of wealthier families.
Critics argue there’s another catch that isn’t immediately obvious. The federal government doesn’t have billions of dollars sitting idle to fund the program.
Instead, they say, the money is being added to an already ballooning national debt, meaning many of the same children receiving the $1,000 today will eventually grow up into the taxpayers helping cover the cost of financing it through future taxes and interest payments on that debt.
Economist Peter Schiff was among the loudest critics, arguing there was “nothing to celebrate” because the program gives newborns money with one hand while adding to the debt they will ultimately inherit with the other.
While the Treasury has disputed that characterization, saying the payments are structured as refundable tax credits under existing law, critics counter that the money still comes from a federal government running massive annual deficits that must continue borrowing to pay its bills.
However, experts say kids from middle- and lower-income families, which are disproportionately families of color, they’re at a major disadvantage compared to the children of rich parents.
That’s because in order to make the investment grow in a significant fashion you have to continue contributing to the accounts which will gain and lose according to the stock market.
The new account allow parents of babies born between December 1, 2025, and December 31 of 2028 to get $1,000 in seed money from the government for each child with the intention of growing the money in the stock market for the next 18 years.
At least half of all Americans opening these Trump Accounts, which launched on the Fourth of July this year won’t be able to make the up to $5,000 in annual contributions to help increase the fund because they’re trying to keep food on the table and a roof over their heads as consumer prices under Trump continue to skyrocket.
Adding to that, when a disadvantaged child turns 18, the year they can withdraw the funds, instead of leaving the money alone until later in life, these children are more likely to need the investment for education, career development or just basic livelihood.
Higher-income households are better positioned to make maximum annual contributions and leave funds invested long-term, whereas lower-income families may need to liquidate balances early for basic needs,” Bloomberg reported.
Researchers at the Penn Wharton Budget Model have also warned that rising federal debt tied to the broader law ultimately leaves future generations economically worse off through slower wage growth, weaker investment and higher lifetime costs, with the biggest losses falling on lower-income Americans.
Critics of the deficit spending plan also point out that these funds are a big boost for American companies because the money is invested in the stock market.
The portal to sign up for these accounts announces in big, bold lettering, “Big things start with small steps.”
USA Today readers blasted the Trump accounts calling them “less than bright” and a Republican giveaway.
“Companies get the tax break and the kids get to pay the bill. Standard operating procedure for the GOP. This is what the less than bright voted for!” a reader stated.
Reader R NB remarked, “Gop has proven to be the worst party in cutting spending starting right from Reagan days. Every single Republican president has increased the deficit since Reagan.
A reader named Michael lambasted the program. “These investment accounts are already worthless based upon the amount of federal debt Felon 47 has added during his second term.
The U.S. deficit has reached $1.36 trillion, according to the Treasury Department, and financial experts say that means when these newborns with the Trump Accounts reach adulthood, they’ll be footing the bill for these accounts.
Others weighed in.
A reader named Joe pointed out, “This isn’t any different than the deficit financed Trump tax cuts from his first and second term. I equate it to taking out a cash advance on a credit card. It gives you more cash in your pocket today but has to be paid back with interest so costs you more than had you not done anything. Of course the billionaires don’t care as they will never have to pay it back.
This commenter agreed, “Republicans live their excessive debt spending.”
“It’s another Trump Scam,” a YouTube viewer proclaimed.
According to Moneywise, 1.7 million children eligible children have signed up for the seed money and about $1.5 billion has gone into the accounts since July 4, a figure that includes the government’s money and additional deposits from the families.
