START
Kathryn: Hello and welcome to Optimist Economy. I'm Kathryn Anne Edwards, economist.
Robin: And I'm editor Robin Rauzi.
Kathryn: On this show, we believe the US economy can be better and we talk about how to get there, one problem and solution at a time.
ANNOUNCEMENTS
Kathryn: Today on Optimist Economy, we're going to talk about one very special solution that will soon be renamed Trump accounts.
Kathryn: The title of this episode will not be Trump accounts because that thing's not long for the world.
Robin: So first up, some announcements. We had two spiritual sponsors that I want to shout out this week, but one wants to be anonymous, which reminded me to say if you would like to be anonymous, we'll still take your money. We also got a spiritual sponsor level donation from Marine in West Marin, California. Thank you both of you.
RETCON
Kathryn: Now we move on to Retcon.
Robin: Which is where we reflect and talk about things we maybe should have brought up before or things that have come up since.
Kathryn: Yeah, so after the last Retcon, which was very long, I need to retcon quickly that I talked a lot about “Bend It Like Beckham” at the start of the season and said in fact that I like to watch a movie that's based on the destination of the place I'm traveling to. My sister was like, that is absolutely my idea. You stole it from me. I even told you to watch “Bend It Like Beckham” before you left for London. You didn't give me any type of shout out or hat tip.
Robin: Credit to your sister.
Kathryn: So I need to give credit to my sister. Maybe she would prefer an addendum about all the good ideas I've stolen from her, but unfortunately we just don't have the time. We have to move on.
Robin: Moving on. I got a lot of emails this week about Buffalo, strangely about how buffalo can be used as an adjective, meaning you are from Buffalo, the city. Buffalo is a noun, but also then buffalo as a verb. And anyway, so I did look it up in my OED. Buffalo is just American slang in terms of being a verb.
TERMS & CONDITIONS
Kathryn: Okay. Terms and Conditions. Did you look anything up?
Robin: I looked up two things this week. First I looked up Calvinball, which I read in a column this week, and it just said they're playing Calvinball. And I was like, am I supposed to know what that is? And it is a reference to “Calvin and Hobbes”. “Calvin and Hobbes” would play a game and the rule is that the rules have to change every time you play. So this was a reference to, I think, the Supreme Court playing Calvinball.
Kathryn: I really love that.
Robin: Yeah, exactly. I thought this is a good term. I need to absorb that one. The other one I looked up was identity effect, which I was looking up in relation to the thing we're going to talk about today. The identity effect is a theory that people hold sort of multiple senses of themselves and that they decide to choose what actions to take based on what feels most congruent with their internal identity. And it's used in this case, in the case of what we're going to talk about today, as like having a college-going identity.
Kathryn: What's another example of an identity effect?
Robin: Like you perceive of yourself as an athlete and therefore you buy a bunch of sports gear even though you're really never going to use it.
Kathryn: So you're lazy.
Robin: There's a million ways it gets used. It's a psychological theory. It's been around maybe 15 years. We'll talk about it in a minute, but it plays into this whole idea of Trump accounts.
Kathryn: Okay. Well in that case, let's take a break and we'll come back, talk about our centerpiece and in the meantime enjoy our non-ad ad cross promo that we don't make money from. We'll be right back.
CENTERPIECE
Kathryn: Okay. We should probably talk about savings accounts.
Kathryn: This is actually a really fun episode for our listeners. I think we try every week to talk about the economy in a way — try being the operative word there — we try to talk about the economy in a way that will make you less depressed about it and our country. And it's actually quite tough. Gets harder every week actually. Not because of us, but because of he who shall not be named.
Robin: He shall name everything after himself.
Kathryn: You shall not be named unless it's named after him. Anyway, our podcast is now called Trumpcast. So there was in the “One Big Beautiful Bill”, which had so many awful things — it's polling terribly, so now they're supposed to call it like the tax law, the budget law, whatever — but it's the “One Big Beautiful Bill”, signed on July 4th, 2025, when big beautiful things happen. It included something called Trump accounts. Now, if you are anything like a casual follower of the current administration or the man in charge, you would know that if Trump puts his name on something, it could be fraud. Like Trump University. Trump Steaks. Trump casinos. Man's got a history of bankruptcy. So putting money into an account with his name on it has certainly the impression of like, you could just walk out to the pier and throw it in the water. Because it sounds too close to a lot of things that were scam slash bankrupt.
Robin: You're not getting libeled. You don't want to get sued.
Kathryn: I don't want to get sued for libel. God, thank God you're here, Robin. I wouldn't even know what I'm going to be sued for.
Robin: I think you're still in factual territory here. I think you're okay.
Kathryn: But Trump accounts are actually a really amazing good thing and they will be renamed. And that's what we're going to talk about.
Robin: We need to do some table setting.
Kathryn: So what is a Trump account? If you don't want to call them Trump accounts, you can call them 530As.
Kathryn: So, the college savings account for — well, it does — it's not Trump. Let's just explain what they are. They are an investment account that every kid in the country currently under 18 can open up, and they can contribute to it. Their parents, their parents' employers, philanthropists, possibly the government can contribute to it. And it's an investment account for children. They can't touch it until they turn 18, and when they turn 18, it can only be used for specific purposes like a house, education, or starting a business. But it is a way to give every child in the US an asset when they turn 18.
TRUMP ACCOUNTS VS. 529s
Robin: So this is sort of like what we know as 529 accounts, which are like college savings accounts, but they can be used for other things and there are some other differences.
Kathryn: Yes. They have different origins. So in the beginning — individual retirement accounts, an IRA, is a tax-preferred savings and investment vehicle. What you contribute to an IRA is not subject to the income tax. You get taxed on the way out as regular income. So if I put $5,000 into an IRA every year, I invest that money, and in 30 years when I retire, I take money out. I pay taxes on the income I get from the account, not the income that I put in. That's what makes it tax-preferred. And the investment account is that it can be used to invest in the stock market — individual stocks and index funds, what have you. Eventually, IRAs got a sibling, which was 401(k)s, and in that your employer opens up an account. Similar concept. Money is not taxed on the way in. So if you made a hundred thousand dollars and you put $10,000 into a 401(k), you're only taxed on $90,000 of income. But that $10,000 you put in isn't subject to the income tax. You're taxed on the way out, and employers can contribute to it as well. What this is, is an IRA that instead of being tied to an employer and instead of being used in retirement, is given to children as early as birth to accumulate investments before they turn 18.
Robin: But they can keep it until they retire, or they can use it anytime after 18.
Kathryn: So the way that the rules are currently written from the “One Big Beautiful Bill”: you can't withdraw before 18 without a penalty. And then once you turn 18, you can use it for a down payment on your first house, education, on the occasion of the birth of a kid, and I think starting a business. Otherwise, it just accrues until retirement.
Robin: The business thing is a little unclear, but yeah.
Kathryn: Now the logic behind this, as well as IRAs and 401(k)s, is that when you have a long-term investment vehicle that's exposed to the stock market, you make the money off of time, not the market.
Robin: You need to be in it a long time.
Kathryn: Yeah. So you're basically giving kids an 18-year head start because you set up an account for them at birth. It has 18 years to accrue and then they get that money. And most of the money they've made has come from exposure to just how long the investment has gone on, less so the investments themselves.
Robin: A couple of quick questions. One is the Trump accounts — this is a pilot program?
Kathryn: They're piloting part of it. Right now, the way that the Trump accounts are structured — 530A if that's easier — any child in the US who's under 18 can sign up for one this year. I think the earliest they can contribute is July of this year, but they can open up the account this year. However, for kids born in calendar year 2025, '26, '27, and '28, they are piloting that the federal government contributes a thousand dollars as seed money.
Robin: And the parents have to open the account. They're not automatically created.
Kathryn: Yes. That is actually the fundamental problem with the accounts as designed right now. So let's go back.
Robin: Let's go back.
Kathryn: Because I'm sure a lot of listeners are thinking, yeah, this was Baby Bonds, right? This was an idea he stole.
ASSETS AND THE POOR
Robin: That was Cory Booker's?
Kathryn: That was Cory Booker's. We're going to go way, way back. We're going to go back to 1991. George H.W. Bush is president. The US is currently in recession. And a professor at WashU St. Louis, Michael Sherraden, writes the book “Assets and the Poor: A New American Welfare Policy”. It's such a good book. What he proposes in this book is something called individual development accounts, or IDAs. He's trying to make the argument that our current system of welfare, which even in 1991 still looks very similar to what we have now, is all income and consumption maintenance. You can't afford healthcare — the government will provide it for you. You don't have much money — you'll get money from cash welfare, which still existed when he wrote it. And it helps you maintain your consumption, but it can actively limit your ability to have assets because for certain programs like food stamps or Supplemental Security Income, if you have assets, you cannot get the cash. So he basically argues that the way to truly change poverty — actually making poor people stakeholders in the economy, as well as giving them a means out of poverty in terms of savings and investment — would be to have individual development accounts that could start as early as birth for children. He outlines in the book how this would be useful for thinking about a new type of welfare, and it's called asset-based welfare policy. And what he points out is that the US has asset-based welfare for middle-income people and high-income people. They don't have it for poor people because of how 401(k)s are gatekept through employers and how IRAs require someone to be working. And so his point is, if you set up a universal account that everyone can get, and the federal government only contributes to poor people's accounts, this would radically alter what it means to be poor in the United States. And he writes this in 1991.
ONE IDEA WITH MANY NAMES
Kathryn: Now if you think Cory Booker stole his idea — the first congressional proposals in the 1990s, most of them had a Democrat and a Republican sponsor. Some of them were only Democrats, some of them were only Republicans. So it starts off in the nineties with KidSave. In the mid-2000s, the ASPIRE Act. Baby Bonds in 2007. And then PLUS Accounts, Young Savers Accounts, Roth at Birth, RAISE Act, 401Kids, US Accounts, American Opportunity Accounts, Baby Bonds 2.0. The first Baby Bonds was Hillary Clinton. The second Baby Bonds was Cory Booker. The first 401Kids was Schumer. The second 401Kids was Senator Casey from Pennsylvania. And then we get the Trump accounts.
Robin: So this idea has been around obviously a long time and has been proposed over and over again. Why did it take this long?
Kathryn: Truthfully — I'm trying to think of what is my best way to answer this without sounding sassy. So Sherraden proposes this in 1991 and we almost immediately have proposals in Congress to do something similar. But we have states that have adopted this, and his institute at WashU St. Louis has been instrumental in helping states set up their accounts. So it's not successful at the federal level until now, but there were lots of state policies that informed this.
SEED OK
Kathryn: One of them was SEED OK.
Robin: That's Oklahoma.
Kathryn: That's Oklahoma. Those kids are either 17 or 18 now. They set up SEED OK as basically this baby bond, 401Kid, Trump account, 530A, whatever you want to call it. He called them individual development accounts, but they were often referred to as CDAs —
Robin: Child development accounts.
Kathryn: And CSAs — child savings accounts.
Robin: This is very confusing.
Kathryn: Well, every time someone wants to claim it as their thing, they give it a new name.
Robin: Which is what happened here.
Kathryn: Yeah. We're going to rename it and then tell people it was our idea. But it was originally individual development accounts. Oklahoma set it up as a randomized control trial with two groups: the treatment and the control. The control group was given the option to opt into the savings account. The treatment group was opted into the account and was given the option to disenroll. And they could follow these two sets of kids for 17 years to see how much they had saved. I don't think this should surprise anyone: after 17 years, a hundred percent of treatment group children still hold the asset-building accounts compared to 6% in the control group.
Robin: 6%. So if the parents had to opt in, only 6% do. But if you create it automatically, no one leaves.
Kathryn: Or they had closed the accounts beforehand. So maybe they signed up but then took the money and didn't bother putting any more in because they didn't see the point of it or didn't have the money for it. But auto-enrolling kids and putting a thousand bucks into it — a hundred percent of them still had the assets 17 years later. So those SEED OK kids are either 17 or 18. And the next stage of this research project is what they're going to spend it on. What they do with the money. They got a thousand bucks when they were zero years old and were opted into this account and a hundred percent of them still have it. I think when I read the paper, one family opted their kid out and everybody else stayed in.
Kathryn: There also was one in Rhode Island that started in 2010. They did an incredible amount of messaging, had seed money, but you had to sign up, and they got just over 50% of kids enrolled. Maine started up as opt-in as well, but they switched to opt-out because it worked better and it was much cheaper to administer. And California and Pennsylvania are starting their own child savings accounts and they are both opt-out. So it's taken a while for federal policy to come in, and I should say his proposal was really successful in other countries.
Robin: Oh, really?
Kathryn: Yeah. Other countries were like, this is a great idea, we should do it. And America's like, wait a minute. But have you thought about pulling yourself up by your bootstraps and not helping poor people and giving them a systemic disadvantage? Have you thought about that? And they're like, no, we haven't. We're just going to start it. So lots of other countries have started these accounts, not the US. And I should say I don't really love the name Trump accounts, but Sherraden at the start of this year wrote an opinion in “The Hill” that said every kid needs one and you can make this good. This is an incredibly good policy. You just have to do it right.
POLITICS GETS IN THE WAY OF POLICY
Kathryn: I guess one of the reasons I wanted to tell optimists about this is that there is such good policy out there proposed by people who don't let politics and pride get in the way of pushing for good policy. And it feels like we are in a political quagmire where nothing good can ever happen. But I think that if you go down a level, you'll find a lot of people who are fighting for very good policy and they don't have loyalty to party first. People who care about policy don't always operate the way that people who care about politics do. They will do policy above politics, whereas political leaders will put politics above policy. So I wanted to bring this up to say that there are really good people fighting for very good things that would help America. I can't imagine writing a proposal in a book in 1991 of like, hey, we should have this child development account. We should do this for kids, change poverty. And then 35 years later have Trump be like, it's my account, I put my name on it. And to actually literally the next day go out and say, this is great. Those people exist, and we are going to get really good policy from them. Here's the part that kills me. Ted Cruz is instrumental in getting Republicans to care about this. And that one cuts real deep because I do not like Ted Cruz. I have met him. He's worse in person. But he got basically Republican Silicon Valley people to be like, this is a great way to expose Americans to real economic mobility, which is the stock market.
IDENTITY EFFECT
Robin: See? Okay. Beyond the visceral response that Trump putting his name on everything creates in me — I have to say, I'm kind of dubious about this idea for a number of reasons. I'm not an expert and I'm not an economist, but it's not that I don't think the federal government should be helping children or people who are poor. I've kind of been creeped out by the idea that we want to shovel this money into the stock market and create little investors. That's getting back to the notion of the identity effect. The identity effect piece of this, when I was reading about it, is that if you create these accounts, there's a research question as to whether it creates in the child a sense of identity that they are college-bound. And that these accounts, particularly the 529 college savings accounts, are most effective when you are trying to push on both buttons — you're creating the accounts and the money, but you're also creating the identity. So those two things work in parallel. There's a question: if you give the kids money, do they begin to think that they are college-bound, or is it because the families think that their kids are college-bound and so they open these accounts?
Kathryn: Interestingly enough, college savings accounts in these 529s, where these are investment accounts like retirement accounts but for college, have a separate origin story. They came out of state governments trying to come up with ways to help students in their state afford college tuition. And then they were given a broader mandate in 1996 or '97. But I get what you mean. Like, what if you give every child an investment account at birth? What are they like when they turn 18? What kind of expectations does it build?
Robin: Well there's that, but I also think that in our sense of who we are as Americans and our national identity — we're constantly like, we're consumers. And I don't know that it's any better to be like, oh, we're inherently investors.
Kathryn: So, holding up the blue book, Sherraden says it builds the identity of being a saver. And that even in the eighties there was evidence that you kind of build the idea of saving into a kid and that savings is how — and the investment in the stock market is a secondary part. You have to save and over a long time. Right now the Trump accounts are limited. They can't be invested in individual stocks. They have to be invested in an index fund and it has to have an incredibly low cost. They basically can have no maintenance fees. In order for it to be eligible for a 530A investment, it has to be a low-cost index fund.
Robin: But it could have gone into treasury bonds or something.
Kathryn: Yeah, they could have done something safer. The notion of an index fund is that it's a cheap way to invest and you basically gain when the market gains, as opposed to betting on the success of a single company. You're kind of betting long-term on the success of the US stock market. Something I think about all the time is people who are basically in an asset-building welfare program for rich people who talk about how poor people need to understand personal finance. And they say like, anyone can get an IRA, anyone can do this, you just need to understand personal finance and you could be rich too — even as they are being handheld through asset building.
Robin: Exactly. At their employers where they have little seminars for them to open their 401(k).
Kathryn: Yeah. And for what it's worth, 401(k)s were also quite unsuccessful as retirement savings vehicles until they became opt-out instead of opt-in. Now the majority of 401(k) offerings are where your employer starts a 401(k) for you unless you explicitly tell them not to.
Robin: That's right. And that's recent, right?
Kathryn: Yeah, that came out of a lot of the eighties and nineties. There was a ton of opt-in, opt-out research for 401(k)s. So I know that people who take pride in their own financial ability and literacy will say, I would've opted in. But the stats say it's not a sure bet. Sherraden brings up this really fascinating example of what makes someone a saver. He talks about the US versus Japan. During the Great Depression and into World War II, the US had really high savings rates. And Japan was a country that had very low savings rates. But after World War II, we didn't have a Marshall Plan for Japan. We weren't going to help them rebuild. And they needed access to capital. So they changed their income tax structure to give tax breaks for interest from savings accounts, and they became a very high-saving country. So he kind of pokes at this notion of cultural thrift — some countries save better than others, the French are such great savers, the Americans are not because we care about consumption. And he's like, a lot of this is very —
Robin: Structural.
Kathryn: — just what are you encouraged to do and how are you helped. So we don't know if Americans are good at saving because we do a lot of things to tell them not to save —
Robin: And tell them to spend.
Kathryn: — and we don't give them the same type of structural support for savings that other countries have. All of these things are manipulable by policy. So the identity effect, I guess, is ours for the taking. We could make it into: we're a country of savers. Granted, there's an equal chance that someone turns 18 and cashes it out right away, but there's restrictions. If you don't spend it on certain things — there's some nanny state of you have to spend it on qualified investments.
Robin: Those things we discussed.
Kathryn: Yeah. And there's going to be kids who turn 18 and buy a dumb house.
Robin: They might buy a dumb house or they might take the penalty and buy a car.
Kathryn: Yes. But I guess the point of the policy is to give them an asset and let them determine how it is returned, or how it ultimately serves their long-term financial life. And I think the stigma that poor people have is that they don't know how to save and invest. When the reality is that they are very much limited from doing so, in the way that you are very much encouraged and can do so easily when you're richer.
Robin: Are you worried at all about this actually making wealth inequality worse? I mean, I can sort of see it as a new additional way, beyond and in addition to 529s, for wealthy parents to sock away pre-tax money for their kids, for grandparents to contribute, for employers to contribute — where people who don't have employers who are going to contribute, don't have generational wealth, I mean, they're going to have something, but it's going to be fractional.
Kathryn: Yeah, I am very worried about it. Just like how if it's not opt-out, this won't work — it'll do something, but it won't work to counter income inequality. It won't work to connect the poor to our society via asset building. None of that happens if it's opt-in. It has to be opt-out in order to really be successful.
Robin: That's a little confusing, the opt-in, opt-out. How about automatically enrolled?
Kathryn: Automatically enrolled, yes. Do your parents have the chance to enroll you, or do they have the chance to disenroll you?
Robin: That's even worse.
Kathryn: Okay. Is it voluntary versus mandatory? That's worse because it's not mandatory. You can always opt out. Auto-enrolled versus —
Robin: Yeah. Auto-enrolled versus voluntarily enrolled.
Kathryn: Auto-enrolled versus self-enrolled. Sofi, I like that.
Robin: Sofi for the win.
Kathryn: Sofi for the win. Thank you, production, make us sound good and smart. So the success of these accounts will hinge on auto-enrollment versus self-enrollment. It has to be auto-enrollment to really make a difference. That's part one.
WHERE DO THE CONTRIBUTIONS COME FROM?
Kathryn: The second part, conditional on having auto-enrollment, is: where do the contributions come from? The original vision was the government contributes into the accounts of poor children.
Robin: Right.
Kathryn: That's not what's happened this time.
Robin: Because it's everybody. The $1,000 in the pilot —
Kathryn: It's $1,000 for everybody, otherwise up to $5,000 per year. There's some clipping. There's a cap on how much you can put in — it's five grand a year.
Robin: That anybody else can put in, with some exceptions for big charities or whatever.
Kathryn: Yes. But the real question comes down to how the federal government will tilt the scale in terms of the investment that it makes. And I think that will change how this account works because there's no really clipping the wings of very wealthy children. Their parents, their grandparents, their parents' employers, possibly even their grandparents' employers would start contributing on their behalf. It's a trust fund for the middle class, which is great, but that's a voluntary trust fund because they could afford it. The question is what can we do for people who can't afford it? The real long-term key is what does the federal government do to actually build these assets.
Robin: Yeah. I read that some of the companies that were right out of the gate saying they're going to contribute, like Chase, BlackRock — I was like, hmm, yeah, that's going to help. The kids of BlackRock employees.
Kathryn: Yep. But one of the things that Trump accounts have said is that they would take philanthropic contributions. So Michael Dell of Dell Computers has pledged that he will invest in accounts for people.
Robin: I think he's doing it nationwide. Something like $250 to every kid.
Kathryn: So — and those computers are just okay. But the current administration is leaning towards philanthropic supplements. Someone like Michael Dell comes in and can say, all the kids in Houston who are in an HISD Title I campus, we're going to donate to their Trump account. They're setting it up for philanthropic contributions, which are never as generous, never as reliable, never as fair as the federal government giving it to the lowest income. So I think it's a fair question of what we want this policy to accomplish. If we want it to truly change what it means to be poor and grow up poor, and what kind of advantages kids have when they're rich — it comes down to these types of decisions. The thing to keep in mind though is that none of this is set in stone. We could have 10 years of people doing this and find that philanthropies are very good at finding lower-income kids, but not good at finding poor kids. And then the federal government needs to step up.
Robin: I think about the dearth of philanthropy in parts of rural America. There's wide gaps and holes. It's a hole-filled blanket.
Kathryn: It's the quilt, right? The quilt that's torn to shreds. America! Hold on. That's not optimist. I got to workshop these metaphors. But I mean, it's really a teacher's pet situation. They like you, they decide it's worth it, they will give you money. If you can imagine someone who's not a pet, doesn't get to be the one that they like — you could end up with people being left behind.
LEAVING PEOPLE BEHIND IS A POLICY CHOICE
Kathryn: So this system can be designed to leave people behind, or it can be designed to not leave people behind. That is a policy choice. It's also one that we can change. Getting this started is one thing. Making it better is another. I think frequently of the Social Security Act of 1939.
Robin: Do you now, like daily, as you make breakfast and drink coffee?
Kathryn: Yeah. The Social Security Act of 1939 is my Roman Empire. The Social Security Act of 1935 is when the program begins. That program was just wage insurance for only workers, didn't cover their family. And before they even started paying out benefits for Social Security, the '39 amendments dramatically altered the program to be a truly insurance program for the family who lost a worker. So you didn't have spousal benefits, you didn't have child benefits. It was just —
Robin: It started in 1935 and those got added in 1939.
Kathryn: And the program that we know, and some of the features that have made it truly transformative for families in America, is not just that it helps a worker in retirement but that it helps families who've lost a worker. And I think about this with something like Trump accounts: hey, y'all, we don't got to keep it like this. We can change it. 2029, we can change the name. Right? So right now it's self-enrollment and it's a form that you can fill out. You can add a checkbox on your taxes, but —
Robin: We've discussed this, why taxes are not the mechanism through which all social policy should be done.
Kathryn: Yes, roughly 10% of children live in a non-filing household. So if you're self-enrolling Trump accounts through the tax system, you are at a minimum going to miss 10% of kids. Now they're opening up other ways to do it, not through taxes, but we had stimulus checks — as Sherraden brings up in his op-ed in “The Hill” — we had stimulus checks during the pandemic that roughly 10 million people didn't claim because they didn't have a regular tax filing and they didn't know to go get them. So the government offering you money, you didn't get because you just didn't know to fill out the form. Add that to an investment account that doesn't have any money in it, and you're not going to enroll.
Robin: And it's called a Trump account.
Kathryn: And it's called a Trump account.
Robin: Which will turn some people off.
Kathryn: Yeah. If a kid is auto-enrolled but their parents just don't ever do anything with this account, how are they to know that it exists when they're 18? How are they going to get it?
Robin: Good question.
Kathryn: You should get statements mailed to you. It'll be tied to your Social Security number, not your parents' address. So the account's in your name. I think it's broader messaging, right? Like you tell high school seniors —
Robin: You all have one, I guess.
Kathryn: Yeah. And there's also things that happen when you turn 18 — we do Motor Voter because when you go get your driver's license, you register to vote. So you do a Motor Voter of like, okay, you're 16, you're a Motor Voter Saver, and here's information about this account that you'll get in two years. There's lots of ways to do information interventions and educational interventions for kids as they age. And if they don't know about it and don't touch it and they wake up at 35 and they're like, oh my God, did you guys know there was an account? Then the money's just waiting for them, having accrued in some index fund. It's not use it or lose it at 18. Some of the projections on this are like, this is actually just a way to get people retirement and they can retire really early.
Robin: Yeah, that'd be nice. Good for them.
OPTIMISM
Kathryn: I am very optimistic that this policy will be good, and for a couple reasons. A Republican passed it and he put his name on it, so it becomes a bit of a legacy thing.
Robin: He's bought into it.
Kathryn: The Treasury Department release — they've tied it to the 250th anniversary of the country, the — whatever it's called —
Robin: I was looking that up the other day. The semi-quincentennial.
Kathryn: Semi-quincentennial. So they've made this like — the release from the Treasury Department was like, this is the crowning achievement of the Trump administration's semi-quincentennial celebration. And you can start contributing to the accounts on July — I think it's July 4th, 2026. So they have absolutely claimed this as theirs. Which is like, totally fine, but we're going to change the name and make the rules better. And the Democrats who have been working on this for 35 years and the Republicans who have been working on this for 35 years can make this better. Getting it passed can sometimes be the hardest part, but policy doesn't end there.
PUSH FOR A POLICY
Robin: It's funny, this reminds me of something you said last season about isn't it better to know the policies you want to support and push for a policy, not a politician. This is something that's good despite the politician and despite the name.
Kathryn: Yeah, exactly. But you were telling me something I said, so I didn't want to be like, yeah, exactly what I said. High five to this girl from this girl. I didn't want to do that.
Robin: But you did.
Kathryn: I did. My sister is going to be sitting here eating popcorn being like, this is so you. "Exactly what I said" is like the good thing. She's going to give me so much shit for this. However —
Robin: I mean, I did say it.
Kathryn: It's helpful. But I guess, optimists out there, don't take the part about me quoting myself as the takeaway here. I think this is a great example of good policy beating bad politics. I don't know if, outside the policy circles, you would've known that this was proposed in 1991. That it has been through iterations across various states. That we've done treatment and control group research experiments on it. The name and the origin can be so ephemeral to how the thing actually plays out. So yeah, listeners, we would love to hear your questions about this. And I know for a fact that if you optimists have any questions in particular for Sherraden and the team in St. Louis that are still actively working on this — I know for a fact they're listening because I emailed them before the episode. I was like, there's a guy who works there who I've known for a while, and he was like, well, send me the episode because I want to make sure we all listen to it. So they're going to listen and send me corrections. We'll do a retcon of this episode for all the things I got wrong that the team at St. Louis — Sherraden and friends — points out. It is called the Center for Social Development. Really great people at WashU St. Louis. But if you have questions for them, for me about this, please send them in because this is something I truly believe we have a lot of ability to exercise as voters. You tell your member of Congress: change the name and auto-enroll. That's a really niche thing to call your member of Congress about, but this is something that can make a big difference.
Robin: So yeah, email us at optimist.economy@gmail.com.
EXECUTIVE ORDERS
Kathryn: All right, we're back. We end the show with executive orders. Sometimes petty, sometimes meaningful ways that we would change the world in a relatively anti-democratic way because it just comes from us. Robin, what is your executive order this week?
Robin: Well, it's not mine. It's from Tamara Deo of Corona, California, who wrote in with her anti-shrinkflation executive order. Her order was that ingredient items — she includes meat, but I think meat can be whatever weight it should be — but canned foods, yeast, anything you're cooking with should come in standard sizes. Not one and three-quarters cups of chocolate chips, or 15 ounces of ricotta cheese. This happened to me actually in reverse the other night. I was making dinner and I was like, am I crazy or is this an enormous amount of spaghetti sauce? And it was. It wasn't just that Costco made me buy two jars — they made me buy two jars that are 28 ounces instead of 24. Standard sizes, please. And if you're doing a shrinkflation, you can do that, but you have to call it out on the packaging in big print, like a big sticker, for six months.
Kathryn: I'm going to rename this the Deli Rule. It's got to come in one of the containers, right? You've got four sizes of deli containers, and that's all of the food you get. Everything has to come in a deli container. You've got four sizes and it's all you can do. And then maybe something else for tomato paste.
Robin: Who needs a can —
Kathryn: The tube I think actually works quite well.
Robin: Also you can freeze tomato paste.
Kathryn: And you can forget about it and leave it in there. And then they fall to the bottom and then the bottom of your freezer is red and you wonder if you've murdered someone and forgot about it, but it turns out you just had tomato paste and then a little bit of a leak and then you never do it again. Lot of options.
Robin: Options. Kathryn, what's your executive order?
Kathryn: My executive order is that air machines for tires at gas stations need to accept a form of payment that's not quarters.
Robin: Oh, you mean for an air pump.
Kathryn: Yeah. You have an air pump, you need to put air in your tires. And it's like, here is a metal box that you put quarters in and allegedly after putting in a certain number of quarters, this machine will turn on. You have no way of knowing if it works unless it says broken.
Robin: Or how long it's going to take.
Kathryn: Or how long it goes, or how much air you need. Have you ever run around your car trying to hit all four tires?
Kathryn: I've absolutely eaten shit over the cord. Just frantic. I don't have any more quarters. I've put in so many. I don't even remember how many it took. It just at some point chugged on and I'm running around like an idiot.
Robin: I will say Costco does sell you overly huge things of tomato sauce, but they do have free air pumps.
Kathryn: Costco made me do it.
Robin: Costco for the win.
Kathryn: My other executive order — I'm just going to sneak in to keep up our Olympics theme — is that during the Olympics you can't play bad sports TV in bars and restaurants.
Robin: Just Olympics.
Kathryn: Just Olympics. Why is this so hard? Or MLB TV reporting on when spring training will start in a month. And I'm watching MLB talking about potential starting pitchers for two and a half months from now. And I'm like, can I watch a person propel themselves down an ice tube?
Robin: Skeleton, please.
Kathryn: You have to put on the Olympics during the Olympics.
Robin: This reminds me of my other executive order, which is that there should just be a free broadcast channel where you can watch all the Olympics. I know people pay to get broadcast rights, but we should just all be able to watch everything.
Kathryn: I'm telling you, Kid Olympics.
Robin: And Kid Olympics is also a good idea.
SPIRITUAL SPONSORS
Robin: Okay. Time for spiritual sponsors. As we have made multiple references to, we don't have any financial sponsors for our show yet. We get through the week with our spiritual sponsors. Kathryn, do you have a spiritual sponsor?
Kathryn: My spiritual sponsor is the US women's bobsled team, who took home gold and bronze. I just happened to be watching bobsledding. And then when they won, I was crying harder than they were. The most I've ever cried is whenever the last time I watched the Olympics. It just hits whatever they're going for. I sobbed. Her kids were there. Both of them had kids there. So maybe my spiritual sponsor is just watching athletes with kids win at the Olympics. It's fun when they're from the US, but even when they're from another country, just watching people grab their —
Robin: Did you watch that skater from Kazakhstan?
Kathryn: Yes. Oh my God. The part where he's just looking and he looks confused and then it dawns on him that he's going to medal and then when he wins the gold it's just breakdown, crying.
Robin: And also, I thought Ilia —
Kathryn: Malinin.
Robin: Yeah. I thought he was a class act. He had a horrible performance and he walked right up to that guy and congratulated him. Just stood up there and said it went badly for me. I thought he handled himself with a lot of grace.
Kathryn: And sportsmanship.
Robin: Sportsmanship.
Kathryn: I love when people from other countries hug and they know each other and I'm like, look, they're friends. Yet more people hanging out without me. Yeah, the hugging of the athletes from other countries and they know each other and they're on their tour together — everything. My spiritual sponsor once again is just the Olympics. I just tried to make it something else, but it's the Olympics again.
Robin: My spiritual sponsor is the Pacific Surfliner, which is the Amtrak train that runs from San Diego to San Luis Obispo, which I took last weekend up to San Luis Obispo. Treated ourselves to business class. Has a great snack box that they hand out and you just sit there and watch the ocean go by. It is 1,000 times better than sitting on the freeway.
Kathryn: Wonderful. Thank you. Pacific Surfliner. Trains are fun.
Robin: Sofi LaLonde edits the Optimist Economy podcast and Andy Robinson creates our online videos. You can see them on TikTok, Instagram, YouTube, or LinkedIn. Shout out to both of those guys.
Kathryn: Shout out to both of those guys. If you are interested in chatting with other optimists, we have a subscriber chat on Substack. And of course, thank you to everyone who donates to keep our editor and producer paid. We are at optimisteconomy.com and optimist.economy@gmail.com. And — that's the end. I don't remember what I say at the end anymore. There's a baby homesick. I got to go.
Robin: Got to go.