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- [00:02]
A
A Note from production. 401 kids is so much better than Trump Accounts.
- [00:07]
B
I think things that are named after the numbers in the tax code are actually, like, not great branding.
- [00:13]
A
That's fine. So 401 kids is out. Robin says you basic. Hello and welcome to Optimist Economy. I'm Katherine N. Edwards, economist.
- [00:28]
B
And I'm editor Robyn Rousey.
- [00:30]
A
On this show, we believe the US Economy can be better. And we talk talk about how to get there one problem and solution at a time. Today on Optimist Economy, we're going to talk about one very special solution that will soon be renamed Trump Accounts. The title of this episode will not be Trump Accounts because that thing's not long for the world.
- [00:55]
B
So first up, some announcements. We had two spiritual sponsors that I want to shout out this week, but one wants to be anonymous, which reminded me to say if you would like to be anonymous, we'll still take your money.
- [01:06]
A
Yeah, definitely.
- [01:07]
B
We also got a spiritual sponsor level donation for Maureen in West Marin, California. Thank you, both of you.
- [01:14]
A
Now we move on to Retcon.
- [01:18]
B
Okay. Retcon, which is where we reflect and talk about things we maybe should have brought up before or things that have come up since.
- [01:27]
A
Yeah. So after the last retcon, which was very long, I need to retcon quickly that I talked a lot about Bend It Like Beckham at the start of the season and said, in fact, that I like to watch a movie that's based on the destination of the place I'm traveling to. My sister was like, that is absolutely my idea. You stole it from me. I even told you to watch Bend It Like Beckham before you left for London. You. You didn't give me any type of
- [01:52]
B
shout out or hat tip credit to your sister.
- [01:56]
A
So I need to give credit to my sister. You know, maybe she would prefer an addendum about all the good ideas I've stolen from her, but unfortunately, we just don't have the time.
- [02:04]
B
Okay.
- [02:04]
A
So we have to move on.
- [02:06]
B
Moving on. I got a lot of emails about buffalo, strangely about how buffalo can be used as an adjective, meaning like you are from buffalo, the city. Buffalo is a noun, but also then buffalo as a verb. And anyway, so I did look it up in my oed. Buffalo is just American slang in terms of being a verb. It's not from the animal. I mean, it might be related to the animal, but it means to overpower overall outwit or perplex dating from 1903, at least in the Cincinnati Inquirer.
- [02:41]
A
Okay, okay. Terms and conditions did you look anything up?
- [02:47]
B
I looked up two things this week. First, I looked up Calvin Ball, which I read in a column this week, and it just said, they're playing Calvin Ball. And I was like, am I supposed to know what that is? And it is a reference to Calvin and Hobbes. Calvin and Hobbes would play a game. And the rule is that the rules have to change every time you play. So this was a reference to, I think, the Supreme Court playing Calvin Ball.
- [03:15]
A
I mean, I really love that.
- [03:16]
B
Exactly. I thought, this is a good term. I need to absorb that one. The other one I looked up was identity effect, which I was looking up in relation to the thing we're going to talk about here. But the identity effect is a theory that people hold sort of multiple senses of themselves and that they decide to choose what actions to take based on what feels most congruent with their internal identity. And it's used in this, in the case of what we're going to talk about today as like having a college going identity.
- [03:46]
A
Okay, wait, can you. What's another example of an identity effect?
- [03:52]
B
Like, you perceive of yourself as an athlete and therefore you, like, buy a bunch of sports gear even though you're really never going to use it.
- [04:01]
A
So you're lazy.
- [04:04]
B
There's a million ways it gets used. It's a psychological theory. It's been around maybe 15 years. We'll talk about it in a minute. But it plays into this whole idea of Trump accounts.
- [04:17]
A
Okay, well, in that case, let's take a break and we'll come back, we'll talk about our centerpiece. And in the meantime, and enjoy our non ad. Ad cross promo that we don't make money from. But.
- [04:27]
B
Or know what it is.
- [04:28]
A
Or know what it is. But we put it in the show and now you get to listen to it. We'll be right back. Okay. We should probably talk about savings accounts. All right. This is actually a really fun episode for our listeners. So I think we try to every week talk about the economy in a way, try be in the operative word there. We try to talk about the economy in a way that will make you less depressed. It and our country. And it's like it's actually quite challenge tough sometimes gets harder every week actually. Not because of us, but because of he who shall not be named.
- [05:08]
B
He who shall name everything after himself.
- [05:10]
A
He who shall not be named unless it's named after him. Anyway, our podcast is now called Trump Guest.
- [05:15]
B
There you go.
- [05:19]
A
So there was in the one big beautiful bill which had so Many awful things. It's polling terribly. So now they're supposed to call it like the tax law, the budget law, the whatever law. But it's the one big, beautiful Bill signed on July 4, 2025, when big, beautiful things happen. It included something called Trump Accounts. Now, if you're anything like a casual follower of the current administration or the man in charge, you would know that if Trump puts his name on something, it could be fraud, like the Trump, Trump Stakes, Trump University, Trump Casinos. Like, man's got a history. Yeah. So putting money into an account with his name on it has certainly the impression of like. Or you could just walk out to the pier and throw it in the water. Because it sounds. It sounds too close to a lot of things. That questionable scam, slash, bankrupt. Yeah. I don't want to get, like, libeled.
- [06:18]
B
No.
- [06:18]
A
So I don't know how to get libeled.
- [06:19]
B
You don't want to get sued for libel?
- [06:21]
A
I don't want to get sued for libel.
- [06:23]
B
Yeah.
- [06:23]
A
Thank God you're here, Robin. I wouldn't even know what I'm going to be sued for. But Trump accounts are actually a really amazing good thing. And they will be renamed, and that's what we're going to talk about.
- [06:38]
B
We need to do some table setting.
- [06:40]
A
Table setting. Okay, so what is a Trump account?
- [06:43]
B
What is a Trump account? Why are.
- [06:44]
A
You don't want to. Yeah. If you don't want to call them Trump accounts, you can call them 5:38, 5:30 A's. Yeah. So the college savings.
- [06:53]
B
Because that trips off the tongue.
- [06:54]
A
Well, it does. It's not Trump. I mean, I'm doing what I can here.
- [06:58]
B
We just explained what they are.
- [07:00]
A
Yes, they are an investment account that every kid in the country currently under 18 can open up and they can contribute to it. Their parents, their parents, employers, the philanthropist, possibly the government can contribute to. And it's an investment account for children. They can't touch it until they turn 18. And when they turn 18, it can only be used for specific purposes, like a house, education, kids starting a business. But it is a way to give every child in the US an asset when they turn 18.
- [07:35]
B
So this is sort of like what we know as, like, what are they? 529 accounts, which are like college savings accounts, but they can be used for other things. And there are some other differences.
- [07:45]
A
Yes, they have different origins. So in the beginning, Individual Retirement Accounts is a tax preferred savings and investment vehicle that what you contribute to an IRA is not subject to the income tax. You get taxed on the Way out as regular income. So If I put $5,000 into an IRA every year, I invest that money. And in 30 years when I retire, I take money out. I pay taxes on the income I get from the account, not the income that I put in. That's what makes it tax preferred. And the investment account is that it can be used to invest in the stock market, in individual stocks and index funds. What have you. Eventually IRAs got like a sibling, which was 401ks, and in that your employer opens up an account.
- [08:39]
B
Mm.
- [08:40]
A
Similar concept. Money is not taxed on the way in. So if you made a hundred thousand dollars and you put $10,000 into a 401k, you're only taxed on $90,000 of income tax. Right, right. That 10,000 you put in isn't subject to the income tax. You're taxed on the way out. And employers can contribute to it as well.
- [08:59]
B
Right.
- [09:00]
A
What this is is an IRA that instead of being tied to an employer and instead of being used in retirement, it is given to children as early as birth to accumulate investments before they turn 18.
- [09:17]
B
But they can keep it until they retire or they can use it anytime after 18.
- [09:22]
A
So the way that the rules are currently written from the one big beautiful bill. The way the rules are currently written is that you can't withdraw before 18 without a penalty. And then once you turn 18, you can use it for down payment on your first house, education on the occasion of the birth of a kid. And I think starting a business otherwise
- [09:45]
B
it just seems unclear the business thing. But yeah, yeah.
- [09:48]
A
Otherwise it just accrues until retirement. Now the, the logic behind this, as well as IRAs and 401ks, is that when you have a long term investment vehicle that's exposed to the stock market, you, you make the money off of time, not the market. So it's not that you have to make the most brilliant investment decisions to make money off the stock market. You can make a lot of money
- [10:16]
B
for a long time.
- [10:17]
A
Yeah. So you're basically giving kids like a 20 years head start because. Or an 18 year head start because you set up an account for them at birth. It has 18 years to accrue and then they get that money. And most of the money they've made has come from exposure to just how long the investment has gone on and less. So the investments itself.
- [10:36]
B
Okay, a couple of quick questions.
- [10:37]
A
Sure.
- [10:37]
B
One is the Trump accounts. This is a pilot program.
- [10:41]
A
They're piloting part of it. So right now, the way that the Trump accounts are structured fivethirty A if that's easier. But the way that it's structured is that any child in the US who's under 18 can sign up for one this year. I think the earliest they can contribute is July of this year, but they can open up the account this year. However, for kids born in calendar year 25, 26, 27 and 28, they are piloting that the federal government contributes $1,000 as seed money.
- [11:10]
B
Ah, okay. And the parents have to open the account. They. They're not automatically created.
- [11:15]
A
Yes, that is actually the fundamental problem with the accounts as designed right now. So let's go back.
- [11:24]
B
Okay, all right, let's go back because
- [11:27]
A
I'm sure a lot of listeners are like, yeah, this was baby bonds, right? We've already like, this was an idea. He stole who?
- [11:33]
B
That was Cory Booker's.
- [11:34]
A
That was Cory Booker's. We're gonna go back, way, way back to assets. For the assets and the poor. We're gonna go back to 1991. George H.W. bush is president. The U.S. is currently in recession. And a professor at Wash U St. Louis, Michael Sheraddin writes the book Assets in the Poor, which is the big blue book I'm holding up right now. A New American Welfare Policy. It's such a good book. But what he proposes in this book is something called Individual development accounts, or IDAs. And he's trying to make the argument in the book that our current system of welfare, which even in 1991 still looks very similar to what we have now, is all income and consumption maintenance. You can't afford healthcare, the government will provide it for you. You don't have much money. You'll get money from cash welfare, which still existed when he wrote it. And it helps you maintain consumption, but it can actively limit your ability to have assets because for certain programs like food stamps or Supplemental Security Income, if you have assets, you cannot get the cash. So he basically argues that the way to truly change poverty, that actually making poor people stakeholders in the economy, as well as giving them a means out of poverty in terms of savings and investment, would be to have individual development accounts that could start as early as birth for children. He outlines in the book how this would be useful for thinking about a new type of welfare. And it's called asset based welfare policy. And what he points out is that the US has asset based welfare for middle income people and high income people. They don't have it for poor people because of how 401ks are gatekept from employers and how IRAs require someone to be working.
- [13:31]
B
Right.
- [13:31]
A
And so his point is, if you set up a universal account that everyone can get and the federal government contributes, like the welfare from the federal government, is that they only contribute to poor people's accounts, this would radically alter what it means to be poor in the United States. And he writes this in 1991. Now, if you think, wow, Cory Booker, like, he stole your idea. The first congressional proposal in the 1990s, most of these proposals had a Democrat and a Republican sponsor. One of the. Some of them were only Democrats, some of them were only Republicans. So it starts off in the 90s with Kids Save in the mid 2000s, the Aspire Act, Baby Bonds in 2007, and then plus accounts, Young Savers accounts, Roth at Birth Raise Act, 401 Kids, US accounts, American Opportunity accounts, Baby Bonds 2.0. The first Baby bonds was Hillary Clinton. The second baby bonds was Cory Booker. And then 401 kids. The first 401 kids was Shuler. The second 401 kids was Senator Casey from Pennsylvania. And then we get the Trump accounts.
- [14:40]
B
So this idea has been around, obviously, a long time and has been proposed over and over and over again. And it is what is just the force of will of Donald Trump. Like, why did it take this long?
- [14:48]
A
Why did it take this long? Well, I'm trying to think of what is my best way to answer this without sounding sassy. So Shuradan, he proposes this in 1991, and we almost immediately have proposals in Congress to do something similar. But we have states that have adopted this. And his institute at WashU in St Louis has been instrumental in setting up, helping states set up their accounts. So it's, you know, it's not successful on the federal level until now. But there were lots of states policies that informed this. So one of them was Seed.
- [15:26]
B
Okay, that's Oklahoma.
- [15:29]
A
That's Oklahoma. Those kids are, I think they're 18 now.
- [15:32]
B
If they're not, plenty of time.
- [15:34]
A
They're not 18. They're close. But they set up the seed. Okay, was basically this, you know, baby bond 401, kid Trump account, 538, whatever you want to call it. He called them Individual Development Accounts, but now they're. But they were offered CDAs, child development accounts.
- [15:49]
B
Child development accounts. Yeah.
- [15:51]
A
And CSA's, child savings accounts.
- [15:53]
B
See, this is very confusing.
- [15:54]
A
Well, they get, every time someone, every time someone wants to claim it as their thing, they give it, they rename
- [15:59]
B
it, which is why we just need to name it.
- [16:03]
A
Yeah. You know what we're going to rename it and then tell people it was our idea.
- [16:06]
B
Yeah, okay, good plan.
- [16:08]
A
But it was originally individual development accounts. Oklahoma. They set it up as a randomized control trial and they had two groups, the treatment and the control. The control group was given the option. Option to opt into the savings account. The treatment group was opted into the account and was given the option to disenroll. And they could follow these two sets of kids for 17 years to see how much. See how much they had saved. I don't think that this should surprise anyone. After 17 years, 100% of treatment group children still hold the asset building accounts, compared to 6% in the control group group.
- [16:47]
B
6%. So if the parents had to opt in, only 6% do. But if you create it automatically, no one leaves.
- [16:54]
A
Or they had closed the accounts beforehand. So maybe they signed up but then like took the money and didn't bother putting any more in because they didn't see the point of it or didn't have the money for it. But auto enrolling kids and putting a thousand bucks into it. Yeah, 100% of them still had the assets 17 years later. So those seed okay kids for Oklahoma. Yeah, the okay kids are either 17 or 18. And the next stage of this research project is on what they're going to spend them.
- [17:24]
B
What they do.
- [17:25]
A
Yeah, yeah. What they do with the money, which they got a thousand bucks, you know, when they were 0 years old and were opted into this account. And 100 of them still have it. I think when I read the paper, they said one person opted, like one family opted their kid out and everybody else stayed in. Okay, so that was Oklahoma. There also was one in Rhode island that started in 2010. They did a incredible amount of messaging, had seed money, but you had to sign up. And they got just over 50% of kids enrolled. Maine started up as an opt in as well, but they switched to opt out because it worked better and it was much cheaper to administer. And California and Pennsylvania are starting their own child savings account and they are both opt out. So it's taken a while for federal policy to come in. And I should say his proposal was really successful in other countries.
- [18:22]
B
Oh, really?
- [18:23]
A
Yeah. And other countries have fought, were like, this is a great idea, we should do it. America's like, wait a minute, but have you thought about pulling yourself up by your bootstraps and not helping poor people and giving them a systemic disadvantage? Have you thought about that? And they're like, no, we haven't. We're just gonna start it. So other countries have like, lots of other countries have started these account. The US And I should say, like, I don't really love the name Trump accounts, but Sheraton, at the start of this year, the Hill, the newspaper that follows what's going on in Congress, he wrote an opinion in the Hill that said, every kid needs one, and you can make this good. This is an incredibly good policy. You just have to do it right. I guess one of the reasons why I wanted to tell optimist about this is that there is such good policy out there proposed by people who don't let, like, politics and pride get in the way of pushing for a good policy. And it feels like we are in a political quagmire where nothing good can ever happen. But if you go down a level, you'll find a lot of people who are fighting for very good policy, and they don't have, like, loyalty to party first or, like, if it doesn't come from a Democrat, it's not gonna happen, and we won't support it. People who care about policy don't always operate the way that people who care about politics do. And they will do policy above politics, whereas, you know, political leaders will put politics above policy. So I. I wanted to bring this up to say that there are, like, really good people fighting for very good things that would help America. And I mean, I can't imagine writing in a proposal in a book in 1991 of like, hey, we should have this child development account. Like, we should have savings accounts. We should do this for kids. We should asset, build, and change poverty. And then 35 years later, have Trump be like, it's my account. I put my name on it. It's a Trump account. And to actually, like, literally the next day go out and say, this is great.
- [20:17]
B
This is okay.
- [20:18]
A
Like, those people exist, and we're gonna get really good policy from them. And here's the part that kills me. Ted Cruz is, like, instrumental in getting Republicans to care about this. And that one cuts real deep, because I do not like Ted Cruz. I have met him. He's worrisome person.
- [20:38]
B
I don't know, but he.
- [20:39]
A
He got basically, like, Republican Silicon Valley people were like, this is a great way to expose Americans to, like, the real economic mobility, which is the stock market.
- [20:52]
B
See? Okay, beyond the visceral response that Trump putting his name on everything just sort of creates in me, I have to say I'm kind of. I have felt dubious about this idea for a number of reasons, and I am not an expert, and I am not, not an economist. But it's not that I don't think that the federal government should be helping children or that they shouldn't be helping people who are poor. But first of all, I just kind of like, I'm kind of creeped out by the idea that we want to shovel this money into the stock market and create little investors. That's getting back to the notion of the identity effect. So the identity effect piece of this, when I was reading about it, is that if you create these accounts, there's a question, a research question as to whether it creates in the child a sense of identity that they are college bound and that these accounts, particularly the 529 college savings accounts, are most effective when you are trying to sort of push on both buttons. You're creating the accounts and the money, but you're also creating the identity. And so that those two things work in parallel. There's a, you know, a question like, if you give the kids money, do they begin to think that they are college bound, or is it because the families think that their kids are college bound and so they open these accounts? Right.
- [22:10]
A
You know, interestingly enough, college Savings account in these 529s, where these are investment accounts, they're like retirement accounts, but for college. Those accounts have a separate origin story, which they came out of state governments trying to come up with ways to help students in their state afford college tuition. And then they were given, like, broader mandate in 1996 or 7. But I get what you mean. If you give every child an investment account at birth, like, what are they like when they turn 18? What kind of expectations does it build? Is that what you mean?
- [22:49]
B
Well, there's that, but I also think that our sense of who we are as Americans and our national identity is constantly like, we're consumers. And, you know, I don't know that it's any best better to be like, oh, we're, we're inherently investors, you know, so.
- [23:05]
A
So holding up the blue book, Shaddin says it, it builds the identity of being a saver and that Even in the 80s, there was evidence that you kind of build the idea of saving into a kid and that savings is how. And that the, the investment in the stock market is like a secondary part of you have to save. And over a long. Right now, the Trump accounts are limited. They can't be invested in stocks. They have to be invested in an index fund, and it has to have an incredibly low cost. They basically can have no maintenance fees in order for it to be eligible for a 530 investment. It has to be a low cost index fund.
- [23:44]
B
But it could have gone into treasury bonds or something, right?
- [23:48]
A
Yeah. They could have done something safer. The notion of an index fund is that it's a cheap way to invest and you basically gain when the market gains. As opposed to betting on the success of a single company. Company, you're kind of betting on long term the success of the US Stock market.
- [24:04]
B
Right.
- [24:04]
A
You know something that I think about all the time is people who are basically in an asset building welfare program for rich people who talk about how poor people need to understand personal finance.
- [24:18]
B
Yeah.
- [24:19]
A
And they say like anyone can get an ira. You know, anyone can do this. Like you just need to understand personal finance and you could be rich too. Even as they are being like handheld through asset building.
- [24:30]
B
Exactly. At their employers where they have little seminars for them to open their 401k.
- [24:35]
A
Yeah. Like here's what you should put. Your 401k is not for nothing. 401ks were also quite unsuccessful as retirement savings vehicles until they became opt out instead of opt in. And now the majority of 401k offerings of like your employer starts a 401k for you unless you explicitly tell them not to.
- [24:54]
B
That's right. And that's fairly recent, right?
- [24:55]
A
Yeah, that came out of like a lot of the 80s and 90s. There was a ton of opt in, opt down research for 401ks. So I know that people who take pride in their own financial ability and literacy will say I would have opted in. But like stats say it's not a sure bet. You might not have. Sheradan brings up this really fascinating example of what makes someone a saver. And he talks about the US versus Japan in during the Great Depression and into World War II, the US had really high savings rates and Japan was a country that had very low savings rates. But after World War II we didn't have a Marshall Plan for Japan. We weren't going to help them rebuild and they needed access to capital. So they changed their income tax structure to move to a high income tax state that gave tax breaks for interest from savings accounts and they became a very high saving country. So he kind of of pokes at this notion of like cultural thrift. Some countries save better than others. The French are such great savers, the Americans are not because we care about consumption. And he's like, you know, a lot of this is very, it's structural, structural of just what, what are you encouraged to do and how are you helped. So we don't know if Americans are Good at saving because we do a lot of things to tell them not to save and we don't tell them to spend. Yeah. And we don't give them the same type of structural support for savings that other countries have. And it's like, like all of these things are manipulable by policy. So you know, the identity effect, I guess is ours for the taking. We could make it into this is a savings. Like we're a country of savers. Granted there's like an equal high chance that someone turns 18 and like cashes it out right away.
- [26:45]
B
But there's a penalty right now.
- [26:47]
A
There's a. Well, yeah, if you don't spend it on certain things. So there's some nanny state of you have to spend it on like qualified investments. But you know there's gonna be kids who.
- [26:59]
B
Those things that we mentioned earlier.
- [27:00]
A
Yeah. And there's gonna be kids who turn 18 and buy a dumb house. That will happen.
- [27:06]
B
They might buy a dumb house or they might take the penalty and buy a car.
- [27:09]
A
Yes. Like they'll do something like that. But I guess the point of the policy is to give them an asset and let them determine how it is returned or how it is ultimately serves your like longtime financial life. And I think the, the stigma that poor people have is that they don't know how to save and invest when the reality is that they are very much limited from doing so in the way that you are very much encouraged and can do so easily when you're richer.
- [27:38]
B
Are you worried at all about this? Actually? I don't know. Kind of making wealth inequality worse. I mean I can sort of see it's like a new additional way in addition to like 529s for wealthy parents to sock away pre tax money for their kids, for grandparents to contribute, for employers to contribute. Where people who don't have employers who are going to contribute don't have generational wealth, don't have. I mean they're going to have something, but it's going to be fractional.
- [28:10]
A
Yeah, I'm very worried about it. I think that just like how it's. If it's not opt out, this won't work. I mean it'll do something, but it won't work to counter income inequality. It won't work to connect the poor to our society via asset building. That none of that happens. If it's opt in, it has to be opt out in order to really be successful.
- [28:31]
B
Because it gets a little confusing about the opt in opt out. But like, yeah, how about automatically enrolled Automatically enrolled?
- [28:37]
A
Yes. Do your parents have the chance to enroll you or do they have the chance to disenroll you?
- [28:45]
B
That's even worse. That's totally okay.
- [28:46]
A
Is it voluntary versus mandatory? That's worse because it's not mandatory. You can always opt out. Okay, hold on. Auto enrolled versus auto enrolled versus, you
- [28:59]
B
know, choice to disenroll?
- [29:01]
A
Auto enrolled versus voluntarily enrolled.
- [29:04]
B
Yeah.
- [29:05]
A
Auto enrolled versus not that. What is the. What is the. Let's just workshop this good antonym for auto enrollment of our individual development child saving count Baby bonds for one.
- [29:17]
B
I know, but I think just saying, like, you know, if it's opt out, it's good. You're like, no, wait, I thought opting out is bad.
- [29:23]
A
Auto enrolled versus self enrolled. Sophie. I like that.
- [29:26]
B
Sophie for the win.
- [29:27]
A
Sophie for the win. Thank you. Production make us sound good and smart. Yeah. So, like, the success of these accounts will hinge on auto enrollment versus self enrollment. It has to be auto enrollment to really make a difference. That's part one. The second part is conditional and having auto enrollment. Where do the contributions come from? Yeah, you know, the. The original vision was the government contributes into the accounts of poor children.
- [30:00]
B
Right.
- [30:02]
A
That's not what's happened this time. It's a one.
- [30:05]
B
It's everybody. The $1,000 for.
- [30:08]
A
Yeah, the pilot, it's $1,000 for everybody. Otherwise up to $5,000 per year. So there's some clipping of this and that. There's a cap on how much you can put in. It's five grand a year that anybody
- [30:20]
B
else can put in with some exceptions for big charities or whatever.
- [30:25]
A
Yes. But I think the real question comes down to how will the federal government tilt the scale in terms of the investment that it makes?
- [30:35]
B
Right.
- [30:36]
A
And I think that will change how this account works because there's no, like, there's no really like, clipping the wings of very wealthy children like their parents, their grandparents, their parents, employers, possibly even their grandparents. Employers would start contributing on their behalf, and they will. It's like a trust fund for the middle class, which is great, but that's a voluntary trust fund because they could afford it. It's. What can we do for people who can't afford it? That's. That's. I think the real long term key is what does the federal government do to actually build these assets?
- [31:07]
B
Yeah, I mean, I read that some of the companies that were right were out of the gate saying they're going to contribute. Were like, I don't know. Chase Blackrock. I was like, yeah, that's going to help a bunch of kids who have really.
- [31:19]
A
No, they're just out of the market. The children of blackrock.
- [31:23]
B
Blackrock employees. Yeah.
- [31:27]
A
Yep, yep. But I mean, there, you know, one of the things that Trump accounts have said that they would take, like philanthropic contributions. So Michael Dell of Dell Computers has pledged that he will invest in accounts for people in his community. So you could.
- [31:45]
B
Oh, I think he's doing it nationwide.
- [31:47]
A
Oh, he's doing nationwide.
- [31:48]
B
I thought he was like 250 bucks to every kid or something. It's some crazy amount of money.
- [31:53]
A
And those computers are just.
- [31:55]
B
Okay.
- [31:59]
A
The current administration is leaning towards, like, philanthropic, you know, supplements. Someone like Michael Dell comes in and you can do that in your local community of, like, all the kids in Houston who are in an HISD Title one campus. We're going to donate to their Trump account. Right. Like, they're setting it up for philanthropic contributions, which are never as generous, never as reliable, never as fair as the federal government giving it to the lowest income. Income. So I think that it's a fair question of what we want this policy to accomplish, if we want it to accomplish truly changing what it means to be poor and grow up poor and what kind of advantages kids have when they're rich. It comes down to these types of decisions. The thing to keep in mind, though, is that none of this is set in stone.
- [32:44]
B
Right.
- [32:45]
A
Like, we could have 10 years of people doing like, wow. So it turns out philanthropies are, you know, very good at finding lower income kids, but not good at finding poor kids. We need to have the federal government step up.
- [32:56]
B
Right. I mean, I think about the dearth of philanthropy and parts of rural America. Right. Like, it's, you know, there's, there's wide gaps and, and holes. That's not a. It's a. It's a whole filled blanket.
- [33:09]
A
It's a. It's the, it's the quilt.
- [33:12]
B
Yeah, right.
- [33:13]
A
The quilt that's torn to shreds America. Hold on. That's not optimistic. We have got to workshop these metaphors. But I, I mean, I guess that one way to think about philanthropy and related. We have yet to raise philanthropic funding and get someone to sponsor the show through a big foundation gift. But it is really like a teacher's pet situation. They like you, they decide it's worth it, they will give you money. If you can imagine, someone who's not a pet doesn't get to be the one that they like. You could end up with people being left behind. So this system can be designed to leave People behind or it can be designed to not leave people behind. That is a policy choice. It's also one that we can change. Like getting this started is one thing. Making it better is another. I think frequently of the Social Security Act of 1939.
- [34:05]
B
Here you now like daily as you make breakfast and drink coffee.
- [34:11]
A
Yeah. The Social Security Act of 1939 is my Roman Empire. The Social Security act of 1935, which is when the program begins, that program was just wage insurance for only workers didn't cover their family. And before they even started paying out benefits for Social Security, the 39amendments dramatically altered the program to be a truly insurance program for the family who lost a worker. So you didn't have spousal benefits, you didn't have child benefits. It was just when it started in
- [34:46]
B
1935 and those got added in 1939.
- [34:49]
A
And the program that we know it and some of the features that have made it truly transformative for families in America is not just that it helps a worker in retirement, but that it helps families who've lost a worker. And I think about this with something like Trump accounts of like, hey y', all, we don't gotta keep it like this. We can. 1939 Social Security act, these Trump accounts.
- [35:11]
B
2029.
- [35:12]
A
2029. We could change the name. Right. So right now it is self enrollment and it's, it's a form that you can fill out. You can add a checkbox on your taxes forms. Yeah, but as, as you know, we've discussed this.
- [35:28]
B
Why taxes are not like the way all social policy should be done as a Mechanism.
- [35:34]
A
Yes. Roughly 10% of children live at a non filing household. So if you're self enrolling Trump accounts through the tax system, you are at a minimum gonna miss 10% of kids. Now they're opening up other ways to do it, not through taxes, but again, like we had stimulus checks as Shiradin brings up in his op ed in the Hill where he talks about these accounts. We had stimulus checks during the pandemic that roughly 10 million people didn't claim because they didn't have a regular tax filing and they didn't know to go get them. So like the government offering you money you didn't get because you just didn't know to fill out the form, add that to a like investment account that doesn't have any money in it, like you're not going to enroll.
- [36:18]
B
And it's called a Trump account, which I'm going to guess is going to turn some people off.
- [36:22]
A
Yeah.
- [36:23]
B
So Katherine, if A kid is auto enrolled, but their parents just don't ever do anything with this account. How are they to know that it exists even when they're 18? How are they going to get it?
- [36:34]
A
It's fair question right there. You should get statements mailed to you. It'll be tied to your Social Security number, not like your parents address. So it's the counts in your name. Yeah, I think it's broader messaging. Right. Like you tell high school if your
- [36:49]
B
peers all have one, I guess that might help.
- [36:51]
A
And there's also like lots of things that happen when you turn 18. Like we do motor voter, because when you go get your driver's license, you register to vote. So like you do a motor voter of like, okay, you're 16 years old, you're a motor voter saver. And here's information about this account that you'll get in two years. There's lots of ways to do information interventions and educational interventions for kids as they age. And then of course, if they don't know about it and they don't touch it and they wake up and they're 35 and they're like, oh my God, did you guys know that there was an account? But I had one then. The money's just waiting for them, having accrued in some index fund. It's not like a use it or lose it at 18. Some of the projections on this are like, this is actually just a way to get, get people retirement and they can retire really early.
- [37:33]
B
So, yeah, that'd be nice. Good for them.
- [37:37]
A
I, I am very optimistic that this policy will be good for a couple reasons. One, a Republican passed it and he put his name on it. So it becomes a little bit of a, like a legacy.
- [37:49]
B
They're bought into it.
- [37:50]
A
The Treasury Department release is like, they've tied it to the 250th anniversary of the country. And the, whatever it's called, the.
- [37:58]
B
I was looking that up.
- [37:59]
A
Quad bi.
- [38:00]
B
Tennnial.
- [38:00]
A
Quad, quadrennial.
- [38:02]
B
You're like the duo sesquity. Yeah. I don't know. What do you call a 250th anniversary? Semi quintennial.
- [38:15]
A
Semi quintennial. So they've made this like they're. The release from the Treasury Department was like, this is the crowning achievement of the Trump administration's semi quintennial celebration. And you can start contributing to the accounts on July. I think it's July 4, 2026. So it's. This is like they have, they have absolutely claimed this as theirs, which Is like, you know what? That's like, totally fine. But we're going to change the name and make the rules better. And the Democrats who have been working on this for, like, 35 years and also the Republicans who have been working this for 35 years can make this better. It's, you know, the getting passed can sometimes be the hardest part, but it doesn't. Policy doesn't end there.
- [38:55]
B
Yeah. You know, it's funny, this reminds me a little bit of something you said last season about isn't it better to know the policies and that you want to support and push for a policy, not a politician? You know, is this something that's good despite the politician and despite the name?
- [39:14]
A
Yeah, yeah. I was about to say. Yeah, exactly. But you were telling me something I said, so I don't be like, yeah, exactly what I said. Up high. High five. To this girl from this girl. Here we go. Yeah, I didn't want to do that, but I, I think that that's.
- [39:30]
B
But you did.
- [39:31]
A
I did, exactly. My sister is going to be sitting here. I'm, I'm. I'm envisioning her eating popcorn, being like, this is so you. Exactly what I said is like the good thing, so. Exactly. And she's gonna make. She's gonna be giving me so much for this.
- [39:48]
B
However, I mean, I did say it.
- [39:51]
A
It's helpful. But I guess optimists out there don't take the part about me quoting myself as the takeaway here and referring back to, like, see the things I said before for what you need to know. But I think that this is a great example of good policy beating bad politics. I don't know if you're not in the policy circles, if you would have known that this was proposed in 1991, that it's been through iterations across various states that we've done you treatment and control group researched experiments on it. The name and the origin can be so ephemeral to how the thing actually plays. So, okay, listeners, we would love to hear your questions about this. And I know for a fact that if you optimists have any questions in particular for Sherraddin and the team in St. Louis that are still actively working on this, I know for a fact they're listening because I emailed them before the episode. Yeah, I just like, well, there's a guy who works there who I've known for a while, and he was like, well, send me the episode because I want to make sure we all listen to it. So they're going to listen.
- [40:57]
B
Send You a lot of corrections and send me corrections.
- [40:59]
A
So we'll do a retcon of this episode for all the things that I got wrong that the team at St. Louis with Sheradin and friends points out. It's called the center for Social Development. Really great people at WashU St. Louis, but if you have questions for them for me about this, please send them in because this is something I truly believe that, that we have a lot of ability to exercise as voters that you tell your member of Congress, like change the name and auto enroll. That's a really like niche thing to call your member of Congress about. But this is something that can make
- [41:34]
B
a big difference anyway, so, yeah, email us@optimus economymail.com.
- [41:44]
A
All right, we're back. We end the show with executive orders. Sometimes petty, sometimes meaningful ways that we would change the world in a relatively anti democratic way, because it just comes from us. So Robin, what is your executive order this week?
- [42:00]
B
Well, it's not mine. It's from Tamara Durow of Corona, California, who wrote in with her anti shrinkflation executive order. Her order was that ingredient items. Now she includes meat. I think meat. Meat can be whatever weight it should be. But that canned foods, yeast, anything you're cooking with should come in some sort of standard sizes. Like not 11 3/4 cups of chocolate chips or 15 ounces of ricotta cheese. This happened to me actually in reverse. The other night I was making dinner and I was like, am I crazy or is this an enormous amount of spaghetti sauce? And it was, it wasn't just that Costco made me buy two jars. They made me buy two jars that are 28 ounces instead of 24 standard sizes, please. And air. If you're doing a shrinkflation, you can do that, but you have to call it out on the packaging in big, like with a big sticker for six months.
- [42:50]
A
Okay? So I'm going to rename this the Deli rule. And it's just, it's gotta come in one of the containers, right? It's, it's, you know, you've got four sizes of deli containers and that's all of the food you get in a deli comes in one of those containers. Everything has to come in a deli container. You just, you've got four sizes and that's all you can do. And then maybe something else for tomato paste.
- [43:10]
B
Paste.
- [43:11]
A
Because like, who needs a can of oil? The tube, I think actually works quite well. But I don't know how you also,
- [43:16]
B
you can freeze tomato paste and you
- [43:19]
A
can forget about it and leave it in there. And then they fall to the bottom. And then the bottom of your freezer is red. And you've wondered if you've murdered someone and forgot about it, but turns out you just had tomato paste and then a little bit of a leak and then you never do it again. So a lot of options.
- [43:34]
B
A lot of options. What's your executive order?
- [43:37]
A
My executive order is that air machines for tires at gas stations need to accept a form of payment that's not quarters.
- [43:46]
B
What, you mean, like, for, like. Yeah, an air pump?
- [43:48]
A
Yeah, you have an air pump. You need to put air in your tires. And it's like, here is a metal box that you put quarters in. And allegedly, after putting in a certain number of quarters, this machine will turn on. You have no way of knowing if it works unless it says, like, broken.
- [44:03]
B
Also, how long it's going to take
- [44:05]
A
or how long it goes or, like, how much time do you have exactly.
- [44:09]
B
Like, run. Have you ever run around your car, like, trying to hit all four wheels?
- [44:12]
A
Oh, I've absolutely eaten, like, over the. Like, just France. Like, I don't have any more quarters. I've put in so many in the machine, I don't even remember how many it took. It just at some point chugged on and I'm running around like an idiot trying to put. Yeah, trying to put air in my tires.
- [44:28]
B
Costco does sell you overly huge things of tomato sauce, but they do have free air pumps.
- [44:35]
A
Costco made me do it.
- [44:37]
B
Costco for the win. Yeah.
- [44:38]
A
Costco for win. My other executive order, I'm just gonna sneak in to keep up ar Olympics theme is that during the Olympics, you can't play bad sports TV in bars and restaurants.
- [44:48]
B
Yeah, just Olympics.
- [44:49]
A
No, just Olympics.
- [44:50]
B
Why is it so hard to college
- [44:51]
A
basketball or MLB TV reporting on, like, when spring training will start in a month? And I'm watching MLB talking about, like, potential starting pitchers for two and a half months from now. And I was like, I'm sorry, can I watch a person? Can I propel themselves down an ice skeleton, please? What is going on here? Yeah, you have to put on the Olympics during the Olympics.
- [45:18]
B
I also think, okay, this makes. This reminds me of my other executive order, which is that there should just be a free broadcast channel where you can watch all the Olympics. I know people pay to get broadcast rights, et cetera, but we should just all be able to watch everything.
- [45:34]
A
I'm telling you, Kid Olympics.
- [45:36]
B
Okay. And kid Olympics is also a good idea. Yeah. Okay, finally, time for spiritual sponsors as we have made multiple references to, we don't have any financial sponsors for our show yet, so we get through the week with our spiritual sponsors. Katherine, do you have a spiritual sponsor?
- [45:55]
A
My spiritual sponsor is the US Women's bobsled team who took home gold and bronze. But I just happened to be watching bobsledding. And then when they won, I was crying harder than they were. The most I've ever cried is whenever. The last time I watched the Olympics, like, it just. It brings. It absolutely hits whatever they're going for. They bring it out of me. I sobbed. Her kids were there. Both of them had kids there. And I was like, it's okay. So maybe my spiritual sponsor is just watching athletes with kids, watching people win at the Olympics. It doesn't. Like, it's fun when they're from the U.S. but even when they're from another country, just watching people.
- [46:36]
B
Did you watch a skater from Kazakhstan?
- [46:39]
A
Yes. Oh, my God. The part where he's just, like, looking and he looks confused, and then it dawns on him that he's gonna meddle, and he's like. And then when he wins the gold, it's just, like, breakdown crying. Yeah.
- [46:52]
B
And also, I thought that, what's his God now? I'm not gonna remember his name.
- [46:55]
A
Ilia Malinin.
- [46:57]
B
Yeah.
- [46:57]
A
Yeah.
- [46:57]
B
I thought he. Class act. You know, he had a horrible performance, and he walked right up to that guy and congratulated him, and I thought he handled himself with a lot of grace.
- [47:08]
A
Sportsmanship.
- [47:09]
B
That's sportsmanship.
- [47:11]
A
I. I love when people from other countries hug and they know each other, and I'm like, look, they're friends.
- [47:16]
B
Yeah.
- [47:17]
A
Yet more people hanging out without me. Yeah. The. All the hugging of, like, the athletes from other countries, and they know each other and they're on their tour together. Everything. My spiritual sponsor, once again, is just the Olympics. I just tried to make it into something else, but it's the Olympics again. It's the Olympics again. What's your spiritual sponsor?
- [47:35]
B
My spiritual sponsor is the Pacific Surfliner, which is the Amtrak train that runs from San Diego to San Luis Obispo, which I took last weekend up to San Luis Obispo, treated ourselves to business class, has a great snack box that they hand out, and you just sit there and watch the ocean go by. It is so 1000 times better than sitting on the freeway.
- [47:57]
A
Wonderful. Thank you. Pacific Surfliner trains are fun.
- [48:01]
B
Yeah, it's great. Sophie Lalonde edits the Optimist Economy podcast, and Andy Robinson creates our online videos. You can see him on TikTok, Instagram, YouTube or LinkedIn. Snap out to both of those guys.
- [48:17]
A
Snap out to both of those guys. If you are interested in chatting with other optimist, we have a chat on a subscriber chat on substack. And of course thank you to everyone who donates to keep our editor and producer paid. We are@optimisteconomy.com optimist economymail.com and that's the end. I don't remember what I say at the end anymore.