Trump and Ted Cruz forcing all newborns to borrow $1,000

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Trump and Ted Cruz want all newborns to get $1,000 in an account. And where does this $1,000 come from? The government has no money, it’s $36 trillion in debt. The $1,000 is borrowed on behalf of the newborn, added to the national debt, and the newborn has to repay that debt some day.

So let’s call it what it is:

The “Start your newborn baby off with debt immediately” Bill.

Again, President Trump, I love you, but please call me first before you do anything in the realm of economics or finance. You have my number.

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What would happen if a newborn was gifted $1000 but was not allowed to withdraw it until retirement? And let’s say it was to be invested in (broad term) stock market for 60 years. Would that be a good investment and potentially reduce dependence upon typical social safety nets?

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Both at 12%…Man! That compound interest !!

First at 60 years:

Annual Schedule Monthly Schedule

|Year|Deposit|Interest|Ending balance|
| — | — | — | — |
|1|$1,000.00|$120.00|$1,120.00|
|2|$0.00|$134.40|$1,254.40|
|3|$0.00|$150.53|$1,404.93|
|4|$0.00|$168.59|$1,573.52|
|5|$0.00|$188.82|$1,762.34|
|6|$0.00|$211.48|$1,973.82|
|7|$0.00|$236.86|$2,210.68|
|8|$0.00|$265.28|$2,475.96|
|9|$0.00|$297.12|$2,773.08|
|10|$0.00|$332.77|$3,105.85|
|11|$0.00|$372.70|$3,478.55|
|12|$0.00|$417.43|$3,895.98|
|13|$0.00|$467.52|$4,363.49|
|14|$0.00|$523.62|$4,887.11|
|15|$0.00|$586.45|$5,473.57|
|16|$0.00|$656.83|$6,130.39|
|17|$0.00|$735.65|$6,866.04|
|18|$0.00|$823.92|$7,689.97|
|19|$0.00|$922.80|$8,612.76|
|20|$0.00|$1,033.53|$9,646.29|
|21|$0.00|$1,157.56|$10,803.85|
|22|$0.00|$1,296.46|$12,100.31|
|23|$0.00|$1,452.04|$13,552.35|
|24|$0.00|$1,626.28|$15,178.63|
|25|$0.00|$1,821.44|$17,000.06|
|26|$0.00|$2,040.01|$19,040.07|
|27|$0.00|$2,284.81|$21,324.88|
|28|$0.00|$2,558.99|$23,883.87|
|29|$0.00|$2,866.06|$26,749.93|
|30|$0.00|$3,209.99|$29,959.92|
|31|$0.00|$3,595.19|$33,555.11|
|32|$0.00|$4,026.61|$37,581.73|
|33|$0.00|$4,509.81|$42,091.53|
|34|$0.00|$5,050.98|$47,142.52|
|35|$0.00|$5,657.10|$52,799.62|
|36|$0.00|$6,335.95|$59,135.57|
|37|$0.00|$7,096.27|$66,231.84|
|38|$0.00|$7,947.82|$74,179.66|
|39|$0.00|$8,901.56|$83,081.22|
|40|$0.00|$9,969.75|$93,050.97|
|41|$0.00|$11,166.12|$104,217.09|
|42|$0.00|$12,506.05|$116,723.14|
|43|$0.00|$14,006.78|$130,729.91|
|44|$0.00|$15,687.59|$146,417.50|
|45|$0.00|$17,570.10|$163,987.60|
|46|$0.00|$19,678.51|$183,666.12|
|47|$0.00|$22,039.93|$205,706.05|
|48|$0.00|$24,684.73|$230,390.78|
|49|$0.00|$27,646.89|$258,037.67|
|50|$0.00|$30,964.52|$289,002.19|
|51|$0.00|$34,680.26|$323,682.45|
|52|$0.00|$38,841.89|$362,524.35|
|53|$0.00|$43,502.92|$406,027.27|
|54|$0.00|$48,723.27|$454,750.54|
|55|$0.00|$54,570.06|$509,320.61|
|56|$0.00|$61,118.47|$570,439.08|
|57|$0.00|$68,452.69|$638,891.77|
|58|$0.00|$76,667.01|$715,558.78|
|59|$0.00|$85,867.05|$801,425.83|
|60|$0.00|$96,171.10**|$897,596.93|**

Then at 65 years (The last 5 years make quite a difference.):

Annual Schedule Monthly Schedule

|Year|Deposit|Interest|Ending balance|
| — | — | — | — |
|1|$1,000.00|$120.00|$1,120.00|
|2|$0.00|$134.40|$1,254.40|
|3|$0.00|$150.53|$1,404.93|
|4|$0.00|$168.59|$1,573.52|
|5|$0.00|$188.82|$1,762.34|
|6|$0.00|$211.48|$1,973.82|
|7|$0.00|$236.86|$2,210.68|
|8|$0.00|$265.28|$2,475.96|
|9|$0.00|$297.12|$2,773.08|
|10|$0.00|$332.77|$3,105.85|
|11|$0.00|$372.70|$3,478.55|
|12|$0.00|$417.43|$3,895.98|
|13|$0.00|$467.52|$4,363.49|
|14|$0.00|$523.62|$4,887.11|
|15|$0.00|$586.45|$5,473.57|
|16|$0.00|$656.83|$6,130.39|
|17|$0.00|$735.65|$6,866.04|
|18|$0.00|$823.92|$7,689.97|
|19|$0.00|$922.80|$8,612.76|
|20|$0.00|$1,033.53|$9,646.29|
|21|$0.00|$1,157.56|$10,803.85|
|22|$0.00|$1,296.46|$12,100.31|
|23|$0.00|$1,452.04|$13,552.35|
|24|$0.00|$1,626.28|$15,178.63|
|25|$0.00|$1,821.44|$17,000.06|
|26|$0.00|$2,040.01|$19,040.07|
|27|$0.00|$2,284.81|$21,324.88|
|28|$0.00|$2,558.99|$23,883.87|
|29|$0.00|$2,866.06|$26,749.93|
|30|$0.00|$3,209.99|$29,959.92|
|31|$0.00|$3,595.19|$33,555.11|
|32|$0.00|$4,026.61|$37,581.73|
|33|$0.00|$4,509.81|$42,091.53|
|34|$0.00|$5,050.98|$47,142.52|
|35|$0.00|$5,657.10|$52,799.62|
|36|$0.00|$6,335.95|$59,135.57|
|37|$0.00|$7,096.27|$66,231.84|
|38|$0.00|$7,947.82|$74,179.66|
|39|$0.00|$8,901.56|$83,081.22|
|40|$0.00|$9,969.75|$93,050.97|
|41|$0.00|$11,166.12|$104,217.09|
|42|$0.00|$12,506.05|$116,723.14|
|43|$0.00|$14,006.78|$130,729.91|
|44|$0.00|$15,687.59|$146,417.50|
|45|$0.00|$17,570.10|$163,987.60|
|46|$0.00|$19,678.51|$183,666.12|
|47|$0.00|$22,039.93|$205,706.05|
|48|$0.00|$24,684.73|$230,390.78|
|49|$0.00|$27,646.89|$258,037.67|
|50|$0.00|$30,964.52|$289,002.19|
|51|$0.00|$34,680.26|$323,682.45|
|52|$0.00|$38,841.89|$362,524.35|
|53|$0.00|$43,502.92|$406,027.27|
|54|$0.00|$48,723.27|$454,750.54|
|55|$0.00|$54,570.06|$509,320.61|
|56|$0.00|$61,118.47|$570,439.08|
|57|$0.00|$68,452.69|$638,891.77|
|58|$0.00|$76,667.01|$715,558.78|
|59|$0.00|$85,867.05|$801,425.83|
|60|$0.00|$96,171.10|$897,596.93|
|61|$0.00|$107,711.63|$1,005,308.57|
|62|$0.00|$120,637.03|$1,125,945.59|
|63|$0.00|$135,113.47|$1,261,059.06|
|64|$0.00|$151,327.09|$1,412,386.15|
|65|$0.00|$169,486.34**|$1,581,872.49|**

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Something worth considering, eh?

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I heard of something to that affect. Very smart when done with as little intervention as posable.
If done properly, and managed by an independent, At Arms Length financial planer, until the family member becomes of legal age to be counted as an adult, would be one great way of saving money for that individual. It would be a tidy sum when they reached adulthood. The money amassed would be formidable to use as assets.

As to the second part of your post. The government has no money, it’s $36 trillion in debt.
Why are they in that much debt? Simple when you follow the money. Over spending. Poor to inadequate financial planning or financial governance. I read where the current commander and chief added very close to 8 trillion dollars to that debt. Unsurprising when he claimed hundreds of times on the campaign trails he is the master, no King of debt. He made a fortune being the King of Debt. Here he admits the country was 19 trillion dollars. Another King of debt video & Elon Musk.
Trump made history and is about to do it again under the same policy’s by giving the tax breaks to the wealthiest.

I always find it incredible and hard to believe that US tax payers want and are willing to give more money to bail out this financial mismanagement. Just like tariffs. You are willing to pay out of your pockets, on top of the taxes you already pay, to help this new government’s poor financial miss management, combined with the taxes you are already paying.
Wow. Boy oh Boy, You guys have money to burn.

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Love it when you look in the mirror, buddy! Unfortunately, I and the rest or the MB members do not see any meaningful results.
Too bad.
So sad.

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Sure. But this $1,000 isn’t gifted to the newborn. Instead it’s borrowed on behalf of the newborn.

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Now correct for inflation over 60 years… and then subtract the debt the 60 year-old now owes on that originally-borrowed $1,000.

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How is the money acquired?
Borrowed from whom or what financial institution?
I do not believe your government should pay out the expense. And the policy still has to be voted on and go through congress if I am not mistaken.

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Generally inflation reduces old debt, does it not?

So, if I borrow money at 4% and earn at 10% and my and my borrowed money is only on principal but my earnings are compounded would I not do pretty good?

I mean, is that not the game?

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Sure. But inflation ate up 90% of the purchasing power of the U.S. dollar over the past 60 years. What cost $10 when I was born, now cost $100. And inflation is going to be way worse going forward since the Federal Reserve has to cover much, much, more debt by printing money to pay for it. We’re already doing that.

So it’s not a gift.

If you have $1,000 and give it to me, it’s a gift.
Forcing me to borrow $1,000, restricting my access to it, correcting for inflation over 60 years, and requiring me to pay it back with interest over 60 years, isn’t a gift. It’s meddling. Stay out of my life. Government bureaucrats are the last people on earth who should be sticking their nose into anyone’s finances.

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I completely agree—financial literacy is essential, and the public should be well-informed about the benefits of long-term investing. Personally, I’ve been contributing to my children’s funds since birth, ensuring they have a strong financial foundation. However, I don’t believe it’s the taxpayer’s responsibility to fund my child’s retirement.

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I am just playing a bit of a devils advocate here. I am not supporting the proposal.

Benefits.

  1. Investing now to reduce pressure on the social safety net.
  2. It may increase financial literacy if it comes with transparency. People like watching their money grow. It is a hell of an incentive.
  3. Perhaps allow a parent to buy into the program and/or make it income based.
  4. It may have the power to bring large group of people out of poverty using our public Wallstreet system.

I dunno. I like it better than paying off student loans :slight_smile:

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Those aren’t benefits.

  1. The government has no money. It forced the baby to borrow the money. That makes the baby’s finances worse and more likely to need a social safety net. Nearly everyone on Social Security today wouldn’t need Social Security at all if it wasn’t for government-created inflation of the money supply to cover all the government’s spending.
  2. OK. But only if the screen they are looking allows them to see the debt growing and the loss of purchasing power from inflation caused by printing to pay for that debt. Show all 3 screens. That will help them “increase their financial literacy” right quick.
  3. What parent wants to buy into some investment program that government bureaucrats are running? Good way to lose your money. You know as soon as it piles up, they are going to move it to the general fund and leave those parents with nothing more than an I.O.U., just like they did with Social Security when they spent all of the reserves.
  4. Uh, no. It’s a regressive tax. The people who benefit are people who have large investments in stocks because what you’ve done, in essence, is use babys to borrow money from future generations and pump it into the stock market. Great for me, I just bought a bunch of United Healthcare stock last night. All that borrowed money being forced into the stock market is going to make my portfolio go up. I won’t have to pay it back. But poor people are indirectly funding it and being used as the tricky vehicle to transfer what little wealth they might one day have in the future… to the rich who have their net worth in the market already.
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It would be a really good investment, unless the market crashed and all that money vanished into thin air. It could happen, then what?

And I must agree with Nick on the debt. We currently have a 36 trillion dollar debt that needs to be paid down, borrowing more money will only make the pain worse when push comes to shove, and push will come to shove. We already spend more on interest on the debt than we do on national defense. WTF?

I think a better plan would be for the individual to have a choice between investing into Social Security, the stock market, or both, using the funds an individual currently pays into SS, this way if one loses money in the stock market, the rest of the country is not paying for it.

As for saving SS program, raise the limit from the current $176,000 to $1,000,000. Or better yet, remove the limit all together, problem solved. :grinning:

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Do that and you’ll bankrupt SS. Do you have any idea what the payments would be to some people? Furthermore, the rich live a lot longer than the rest of us, so they’d collect way more.

Best just to write everyone a check for the amount they contributed over the years, WITH INTEREST, apologize, and promise to never try to manage other people’s money again.

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It wouldn’t bankrupt the system if it was done right. Have a progressive payment system in and a regressive system of the payout of benefits. In other words remove the cap going in and cap the benefit going out.

And before you say it isn’t fair, think about who has been paying who that allows muti-millionaires and billionaires to exist.