It's bad enough that Republicans, having secured the White House, Senate and House, are proceeding to advance a sprawling, big-spending bill that promises to give America another huge shove toward the precipice of financial ruin. The aggravation compounds when you take a look under the hood of the "Big Beautiful Bill" and study the details, such as its activation of Trump's idiotic impulse to shovel a trillion dollars a year into the gaping maw of the military-industrial complex, seemingly only because the big, round number strikes him as impressive.

Another example of the GOP embracing big-government imbecility can be found in the bill's proposed "Trump Accounts," which would have the federal government borrow $1,000 per newborn baby, and use the proceeds to seed a savings account with lackluster tax advantages -- accounts that nobody other than redistributionist ivory-tower leftists have been yearning for.

In earlier drafts, these accounts were called “Money Accounts for Growth and Advancement” or “MAGA Accounts.” The final House version of the Big Beautiful Bill renamed them Trump Accounts. We applaud the switch: It's only appropriate that the idea should be firmly etched with the name of America's phony-fiscal-conservative-in-chief. On Capitol Hill, the leading champion of the accounts is Republican Texas Senator Ted Cruz, who's apparently seeking to broaden his wealth-redistribution resume beyond his usual favorite beneficiaries: weapons manufacturers and the State of Israel.  

Here's how these accounts would work: 

Handcuffing babies to an investment protocol that's guaranteed to grow increasingly inappropriate over time, the bill's authors require that the accounts must be funded entirely with US stock funds. At age 2, that may be just fine. However, demonstrating the same lack of foresight that underlies every Congressional decision, it never occurred to the bill's dimwitted champions that it isn't prudent for an 18-year-old to have money they plan to tap for freshman tuition 100% exposed to equity-market volatility. 

Given the asset-class micromanaging, less-than-exciting tax benefits, excessive restrictions on the timing of withdrawals, and the existence of better alternatives like 529 and even Roth IRA accounts, it's doubtful that American parents will rush to add their own money in Trump Accounts, especially when sound financial planning calls for placing first priority on parents' biggest goal of all -- funding their own secure retirement.

The bad reviews are already pouring in. “It’s not very attractive,” Alpha Financial Advisors Ann Reilley told Yahoo Finance. "It just seems like they’re complicating things for no reason.”  Similarly, Tax Foundation senior economist Alan Cole said, “It’s like, 'Thank you government for the free money,' but I care about the usefulness. And realistically, this is the sixth or seventh best tax-free savings account option.”

Meanwhile, given the low prospects for ongoing contributions, financial institutions can't be too enthused about opening up an account with a single $1,000 US government contribution, to say nothing of the cost associated with installing system updates and compliance measures necessary to follow the accounts' overly-complex rules. 

ZeroHedge readers won't be surprised to learn that the man credited as the godfather of these and similar so-called "baby bond" schemes is a progressive leftist college professor: The New School's Darrick Hamilton. Previously the executive director of Ohio State's Kirwan Institute for the Study of Race and Ethnicity, much of Hamilton's work focuses on redistribution schemes to address racial disparities. In 2021, he delivered a lecture titled, "A Moral Responsibility for Economists: Anti-Racist Policy Regimes that Neuter White Supremacy and Establish Economic Security for All.” In it, he decried the disproportionate allocation of capital to people born into whiteness. Naturally, he thinks the $1,000 accounts are too "cheap," and we're guessing he's disappointed that white babies will be eligible.  

Trump's White House Economic Council boss, Kevin Hassett, has joined Cruz in swallowing this leftist Kool-Aid, telling an Aspen Institute audience that the accounts are a "simple solution to help people be connected to financial markets so everybody in the country shares in the wealth.” 

Elizabeth Warren and AOC wouldn't have framed it much differently.