President Donald Trump has unveiled a plan to make every newborn in the United States a stock investor. This initiative is part of his “One Big Beautiful Bill,” a comprehensive tax and spending package that has passed the House and is now under Senate review.
What Happened: The proposal, if enacted, would create a tax-deferred investment account for each child born between January 1, 2025, and December 31, 2028. The government would seed each account with $1,000, and guardians could contribute up to $5,000 annually.
The investments would be limited to broad U.S. index funds with low fees and no leverage.
Withdrawals from these accounts would be restricted until the child reaches 18, and accounts would close when the holder turns 31. The White House emphasized the potential for compounded growth, citing endorsements from leaders of companies like Dell Technologies Inc. and Goldman Sachs Group.
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Renowned investor Warren Buffett, known for advocating early and long-term investing, has not directly commented on the plan. However, experts suggest the proposal aligns with his investment philosophy.
During a Berkshire meeting in 1999, Buffett, while replying to a shareholder who asked how to become a multi-billionaire, said ';start young,' as per a Business Insider report.
“The nature of compound interest is it behaves like a snowball of sticky snow. And the trick is to have a very long hill, which means either starting very young or living to be very old,” said Buffett.
The program aims to address wealth inequality by encouraging savings and financial literacy, though challenges for lower-income families remain.
Why It Matters: The proposal has sparked debate among economists and financial experts. Economist Peter Schiff criticized the initiative, labelling it “unconstitutional” and a “bad idea,” arguing that it could increase national debt burdens on future generations. Schiff suggests reducing deficit spending now to avoid future financial burdens.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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