Trump Accounts for Kids -The What If

 

Trump Accounts: A Historic New Legacy and the Reality of a Changing Global Order

Trump accounts are being introduced as a historic new savings tool under President Trump's Working Families Tax Cuts Act. They're being promoted as one of the largest direct investments ever made in American families, designed to give every newborn child a head start towards lifelong financial security and the American dream.


Each Trump account starts with a one-time $1,000 government seed contribution. Families and others can contribute up to $5,000 a year. The money is invested in a broad stock market index; it remains private property under guardian control until age 18. If it's fully funded and left untouched, it's projected to grow to as much as $1.9 million by the age of 28.

The Promise of the American Dream

Treasury Secretary Scott Bent recently announced these accounts with great enthusiasm, and this truly is a major contribution and achievement by the Trump administration. He has said that the initial seed funding alone stands to make young Americans wealthy. The S&P 500 index being used as the benchmark has grown at around 10.5% per year on average since the 1950s. In this framing, our president is putting the American dream within reach of every citizen.

The "What If": A Shifting Geopolitical Landscape

But here is the "what if." All of these impressive numbers assume that the S&P 500 will behave in the future exactly as it has in the past 75 years. Trump accounts are built on that one assumption: that the American market, the S&P, and the dollar keep their same role in the world.

We are not in that world anymore. We are in a changing order. There are several developments already underway that are likely to short-circuit those S&P assumptions in just a few years. I'll name just two:

  1. The European Union's Capital Markets Union and Banking Union: Together, these are designed to create an integrated capital market for the EU—essentially, an S&P-style system for Europe. As the EU completes its single market, boosts its GDP, and likely brings in more members, its population will move towards about 670 million citizens. That means a rival hub for investment, a rival financial center, and a serious competitor for the capital that has traditionally flowed into the United States and the S&P 500.

  2. The Erosion of the Dollar as the World's Reserve Currency: We are watching the BRICS initiatives, the coming digital euro, and a new digital financial infrastructure being built. All of these moves point in the same direction: reducing dollar supremacy and shifting towards a more multi-polar monetary order.

The Prophetic Blueprint

That does not point to a smooth replay of the last 75 years of S&P history. It points to volatility, redistribution of power, and a rebalancing of where money flows. So when we look at Trump accounts, we have to say the "what ifs" here are not wild speculation. These what-ifs are already in motion.

Does this mean Trump accounts for children are not a good deal? No, they are a good deal. They are a generous policy and they will likely stand as part of Donald Trump's legacy as a transformative president on family savings. But they will not deliver the same stellar past returns of the S&P 500 because the order that produced those returns is changing.

As Bob Dylan sang, "The times they are a-changin'." If you want to understand how this changing order—from the rise of Europe's capital markets to the weakening of dollar dominance—fits into the bigger prophetic blueprint of global power, make sure you subscribe and stay tuned for more.