When President Donald Trump launched his new “Trump Accounts” for babies, he surrounded himself with billionaires, big banks, and a surprise guest: rap star Nicki Minaj. Minaj has pledged hundreds of thousands of dollars, reported between $150,000 and $300,000, to fund Trump Accounts for her fans’ children, the so‑called “Barbz babies.”
But Trump Accounts are political fool’s gold: shiny and celebrity-studded on the surface, structurally designed to leave most Black children with crumbs while channeling real gains to families who already have wealth.
RELATED: Yes, We Need Jobs. We Need Black Wealth, Too
Every child born between 2025 and 2028 is eligible for a Trump Account, a tax-advantaged investment account seeded with $1,000 in public funds if parents opt in. Families, employers, and donors can then contribute up to $5,000 a year, invested in mutual funds and similar products. On paper, the goal is to give every child “skin in the game” and a nest egg for college, homeownership, or retirement.
How Inequality Gets Built In
But analysts warn that Trump Accounts are likely to widen, not close, the racial wealth gap. In 2022, the median wealth for Black families was about $44,900, compared with $285,000 for white families. In Trump Accounts, balances grow with both market returns and additional contributions, so the children who gain the most will be those whose families and employers can consistently add thousands of dollars a year. A child whose family maxes out contributions could hold a six-figure account by adulthood; one whose family cannot add beyond the initial $1,000 deposit may end up with only a few thousand dollars.
Corporate America is already lining up to invest in these regressive investment accounts. As Politico recently reported, companies like Intel, SoFi, JPMorgan Chase, Bank of America, and BlackRock are pledging to match the Treasury’s 1,000dollar deposit for their employees’ children. Venture capitalist Brad Gerstner plans to send $250 to young children in Indiana, while Dell CEO Michael Dell has promised a staggering $6.25 billion contribution.
Who Actually Benefits
Those are real dollars, but they will flow first to families with steady jobs at large firms and access to financial institutions, not to low-wealth income parents least able to save on their own. In other words, corporate Trump Account dollars follow good jobs, not the communities with the greatest need.
For Black families, who are more likely to experience low wages, income volatility, and far less family wealth than white households, that contribution structure is the policy’s fatal flaw. Trump Accounts effectively say: “You, too, can have a big nest egg, if you and your employer can save like the rich.” That is the essence of fool’s gold.
Trump Accounts effectively say: ‘You, too, can have a big nest egg, if you and your employer can save like the rich.’
Decades of data show that Black households hold only a fraction of the wealth of white households, even at similar incomes, because of longstanding discrimination in housing, labor markets, the tax code and the economy’s concentration of wealth over the last 40 years. On top of that, Trump Accounts are opt-in and require navigating banks, paperwork, and investment choices, which policy experts warn will leave many low-income and Black and Brown families out.
If we truly want to close the racial wealth divide, we do not need more fool’s gold. We need policies that recognize how wealth is distributed now and invest most heavily in children starting with the least. That is the idea behind Baby Bonds.
A Different Model Already Exists
Economist Darrick Hamilton, alongside William “Sandy” Darity and other scholars, began developing the Baby Bonds concept more than two decades ago, proposing government funded trust accounts for every U.S. newborn, with the largest deposits going to children from the lowest wealth families.
Today, Baby Bonds are no longer just an idea. States and jurisdictions, including Connecticut, California, and Washington, D.C., have all enacted Baby Bonds-style programs that provide larger, automatic deposits for children in low-income families. Researchers estimate a robust national Baby Bond program could reduce the Black-white wealth gap among young adults by more than 90% at the median.
The contrast with Trump Accounts could not be clearer. Trump Accounts give the same modest $1,000 to every child and then turbocharge the advantages of families who can afford to contribute thousands more each year. Baby Bonds invest far more in children whose parents cannot save, and they do it automatically, without complicated opt-ins or Wall Street gatekeepers. One accelerates existing inequality; the other is designed to repair it.
From Fool’s Gold to Real Investment
Congress should transform these Trump Accounts into progressive Baby Bonds. Policymakers should guarantee larger automatic public deposits for children in low‑wealth or low‑income households, and shift from opt‑in enrollment to automatic enrollment at birth.
To bridge growing wealth inequality, that is the lead cause of ongoing racial inequality, we need to embrace the original structure of Baby Bonds and broader structural reforms that move resources toward families who have been locked out of wealth for generations. These changes would move the program away from fool’s gold and toward something closer to genuine wealth‑building for Black children.
Dedrick Asante-Muhammad is the president of the Joint Center for Political and Economic Studies. Dr. LaToya B. Parker is the senior researcher in the Office of the President at the Joint Center for Political and Economic Studies, where she leads the organization’s Economic Policy and Tax Policy programs.