What Is A MAGA Account? Trump’s Baby Bonus Might Be a New Entitlement

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Chris unpacks the proposed “MAGA Account”—a government-seeded, tax-deferred savings account for newborns. While he sees the financial upside of early compounding, Markowski raises red flags about how this well-intentioned idea could morph into a dangerous new entitlement. From concerns over parental misuse to the potential for political exploitation—including vote buying and reparations—he warns that the policy could be less about helping kids and more about growing government control. www.watchdogonwallstreet.com

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
I've been thinking, you see that smoke coming out in
my ears. You've been given this MAGA account thing a
lot of thought. What is a MAGA account? Basically a
I'm gonna call it a tax preferred savings account for children.

(00:36):
What it would be is the we, the people, we
the people, the taxpayer. I like how they phrase it.
The Treasury will see it accounts with one thousand dollars. No, no,
we the people of the United States of America, the
taxpayers here are going to give a we'll call it
a baby shower gift to every child born in the country.

(01:02):
It goes right now. I think this thing is set
up for twenty twenty five to twenty twenty. I don't
know when it expires yet. They're tinkering with it. At
this point in time, families. Families could add five thousand
dollars to this account a year. The funds will grow

(01:24):
tax deferred, tax deferred. When you take them out. You
can take the money out at eighteen years old if
you want to use it for college or buy a house,
but you have to pay capital gains taxes on that.
If you take it out, it's not you know, not

(01:45):
those things they're going to end up adding to it.
They're going to find carveouts and other things using money
for You have to pay a ten percent penalty and
the capital gains tax the account expires. It is you know,
you have to take the money out when you're thirty
years old. That's how it stands right now. Okay, Yeah,
our fearless leaders are still you know, packing the sausage

(02:07):
right now in Washington, d C. Yeah, they're The sausage
factory is in. It's going at full speed ahead at
this point in time. The Joint Committee on Taxation estimates
that these accounts are going to cost seventeen point three
billion dollars over ten years. Oh okay, okay, again, I

(02:31):
my concern. I don't think it is a horrible idea.
I don't. Again. I'm in the business compounding as the
Royal road to riches. You get kids putting money away
as early as possible. It is a great thing. It's

(02:51):
a great thing. The parent in this case, the parent
in this case is going to be the trustee for
the account, meaning that the they wanted to bad parents
that they could you know, take the money out, to
take the money out in a couple of days if

(03:12):
they wanted to and use it as they wish. Again,
it is what it is. There's no way you're going
to I can't think of any mechanism where you're going
to be able to police. Uh, you know parents that
are going to you know, use this thing for whatever
nefarious reasons, And I'm sorry that exists. All Right, I've
got I've got friends, I've got clients that are in

(03:35):
the education business, and they have to actually go to
people's homes homes to grab kids to bring them to school.
So yeah, yeah, there's a lot of weak ask parents
out there. Let's just leave it at that. The other
thing that really concerns me about this is, in essence,
we've just crash, bang boom. We just created another entitlement.

(04:01):
We just created another entitlement. Now what do politicians do
with entitlements? They use them. They use them to get
themselves re elected. Wow, you can't picture, you can't picture.

(04:23):
They passed this through. We're gonna set the scene here
for you. You can't picture AOC running for president, AOC
running for president and her standing up there on a
podium and saying that the one thousand dollars, quite frankly,

(04:44):
isn't enough. We need to deposit more money into the accounts,
more money into the accounts of minorities, disenfranchised people out there.
They use this as a vehicle for reparations. Oh you

(05:06):
don't see that, Oh I do. I'm just giving you
one example here. You're gonna have another politics in the area.
We don't even even put the reparations, disenfranchised vote, whatever
they want to throw in there. You can just say, hey,
we're gonna give you more money. We're gonna give you
more money, and this is our mechanism.

Speaker 1 (05:25):
To do this.

Speaker 2 (05:26):
Vote for me, Vote for me, if you're planning on
having you for if you're gonna have your young families
out there, We're gonna not one thousand dollars, five thousand dollars. Again,
I might not pass, might not get it through, but
that's you know as well as I do. That's what
it's going to be used for. So do I have

(05:48):
my reservations about this? Yea, because been around the block
a few times. I know how these these elephants and
donkeys operate. Watchdog on Wall Street dot Com