Sen. Ted Cruz (R-Texas) said Trump Accounts for children born from 2025-28 could open the door to Americans paying their payroll taxes into personal accounts invested in the stock market instead of to the federal government, which has borrowed from the Social Security trust fund for years. Cruz suggested at a panel discussion at the Milken Institute’s Global Conference in Los Angeles earlier this week that Trump Accounts could pave the way to transforming Social Security, which faces a $230 billion cash shortfall in 2026. “Here’s the dirty little secret: Trump Accounts are Social Security personal accounts,” Cruz said, arguing that the establishment of Trump Accounts represents an important conservative victory in taking a step toward privatization of Social Security, something that former President George W. Bush attempted but failed to do during his second term. “How did we get it done? You remember George W. Bush tried this in his second term and, sadly, Congress ran for the hills in a display of extraordinary cowardice. How did we get it done this time? It’s because we gave the money to babies so the old people didn’t get p‑‑‑ed,” Cruz said. “But babies grow up,” he pointed out. “That little girl who is born this year, she’s going to be 70, and the math is if you contribute regularly to it, by the time she’s 18, she’ll have $170,000 in that account. By the time she’s 35, she’ll have $700,000 in that account,” Cruz added. “This will become Social Security personal accounts,” he predicted.
I love the “it’ll be 170k in account after 18 years of you contribute to it.”. Just ran that math through a compounding interest calculator and you’d need to contribute 300 bucks a month to the account on top of 10% yearly returns to get to 170k after 18 year. Over half of Americans say they don’t have 500 bucks in the back ain’t no one throwing 300 bucks a child into an account.
So almost all or those accounts are going to have less than 6 grand in them and Republicans will blame poor people for not managing their non-existent money better.
Edit: just did 700k at 35 and that came out to only 200 bucks a month over the full 35 years but if you take the 170k were assuming this 18 year old has and don’t touch it at 10% you end up with 860k at 35. Ted Cruz needs to do better math.
Life can change a lot over that 18 years. I started a college savings account for my daughter. At the time my wife was working and making nearly as much as me, so we had some extra income. 3 years later, she’s out of a job, our house payment doubled because we had to move. These people live in a crazy world, where they believe everyone has 50% of their income not allocated to the absolute essentials. Those of us who are lucky are just barely getting by, many are already under water.
They don’t live in a crazy world. They know everyone’s fucked. They don’t care. They want to profit off it. They’re taking your money for themselves. They know people won’t do anything.
They’re just desperate to keep people investing into the system.
They want steady, never ending capital injection into the market, people paying zero attention and just using an index.
That makes it easy for them to grift with insider trading.
If only the wealthy bought stocks, who would they make money off of?