Trump’s Retirement Plan For All Americans A ‘Step in the Right Direction’: Expert

President Trump is planning to give everyday Americans access to the same type of retirement plan offered to federal workers, and his administration will match their contributions up to $1,000 per year. We heard about that at the State of the Union. Joining us to discuss is Jeffrey Tucker, a senior columnist with the Epoch Times and the founder and president of the Brownstone Institute. Here with us nice and early this morning, Jeffrey, good to see you again. For people who might be struggling to save, is a $1,000 federal match like, you know, would you describe it as some kind of helpful nudge from Uncle Sam, or are there perhaps other private options that they haven't tried out there that might be better? Well, I like your phrase, a helpful nudge. Of course, everybody has the right to save and the opportunity to save, but the problem is that we have more than 50 million Americans who don't have anything like an IRA or a 401k or any other kind of retirement plan apart from Social Security. So this is a problem, and I think it's good that Trump has named it. The money involved is not significant, but I think what might really matter here is the idea of marketing it. If Trump can do it, and if anyone can, he can do it, market these plans out to workers who mostly are on the poorest side of the income spectrum. They are lower income, and they tend to lean towards contract workers and minority populations and women who come and go from the workforce, and they just don't have any kind of retirement plans. And this problem drives Trump crazy. I mean, he's a businessman, and he's thinking, look, you have a wonderful opportunity here to save lots of money and retire very rich or at least well-to-do. Why aren't you taking advantage of it? And interestingly, what Trump's proposing in the State of the Union address, and it was a very splashy announcement and very compelling, but it builds on a program that was actually pushed by Obama, but never really used and then abandoned, and then another one that was implemented by Biden that is similarly not very well used. So the problem is not so much the absence of a program, but just the absence of marketing. So Trump's getting that done. A thousand dollars isn't a lot of money, but it's something, and it means something. There's a larger significance to this also that we could talk about. Yeah, let's dig into that. What's the broader significance here as you see it? Well, this program pairs with Trump accounts that he's encouraging for newborn children to build up wealth that they can access when they're 18 years old, and not tax-free entirely, but tax-advantaged accounts called Trump accounts. He also talked about that. And other programs to build private wealth on the part of all American citizens. This is the drive, this is the purpose, to get everybody invested and make sure that everybody's saving money. The broader significance of this shouldn't be lost on us, though. I think, and I have an article about this coming out, I think, today in the Epoch Times. It was 1936 when Franklin Delano Roosevelt thought he would use the government to force everybody to save, and it would take care of everybody in retirement. That program is called Social Security, and we all pay taxes into it. And it worked for a number of generations where people were paid back a lot of money, and it seemed to be working. Of course, the program was established, it was never on a sound financial footing in the first place. It wasn't really savings, it was not really pay-as-you-go. I mean, it was basically a pure transfer program from working-age populations to retired populations, and it created a kind of a terrible dynamic. And now we're so late in this program's operations that the returns on Social Security are a pittance, just tiny compared to what they would have otherwise earned in the markets. There's certainly some bipartisan panic around that. Do you see this plan as an improvement on that or another evolution of it? No, I see this as an abandonment of an old mythology that government is going to be able to provide all the income its citizens need. I don't think anybody believes that anymore, and I think this is really encouraging. To me, it represents a kind of a sea change, one that is hardly ever talked about and not really noticed. But back in the 30s, everybody thought, in a kind of a socialist way, that the government would be able to take care of everybody from cradle to grave. Nobody really believes that anymore. So all these new efforts are entirely focused on the private sector as the path towards income security. That represents a massive and significant change in something like the ideological structure of income generation in the Western world. I think other countries are going to pick up on this. And to me, this is really interesting, really encouraging, and sort of philosophically significant. And it's left to Trump to kind of drive the point home. The government can help a little bit, but ultimately, it's up to you, and it's up to the private sector, and it's up to the free market of the financial sector to provide you the income and wealth that you're going to need to have a good life. And I think that's a really important message and a big change. Certainly, representing some kind of cultural shift, as you're pointing to, potentially. Do you see any drawbacks here? Well, you know, we have yet to see the way these retirement accounts are going to work, because it was just a speech. We don't have the legislation yet. There's a question about how much fiscal outlay is going to be involved here, if any. If it operates as a kind of a pure rebate on taxes, or that you get to add an additional $1,000 of income you have tax-free, and that's what he's calling a government contribution, I think that would be the right way to go here, so that the government's not actually spending money. On the other hand, if it turns into a pure subsidy, then we've got a problem. There is another issue here, which is, I would rather see a full wall between the financial markets, individual savings, and government. Like, I think government should stay out of this entirely. That's my own philosophical outlook. But I guess, in some sense, that ship has sailed about 90 years ago, so we're not in that world. So we're not entirely where I would like to be, which is just to leave it up to the freedom of individuals to decide entirely. But I do think that Trump's language, and we'll see what the ultimate legislation looks like, but it does seem to be a step in the right direction that I think is understandable. I think it's even meritorious, and doesn't really have any kind of grave dangers, so long as they keep the fiscal outlay for this program minimized, and emphasize tax rebates and tax deductions instead, which I think it likely will. I look forward to reading more in your article today in the Epoch Times. Thank you so much, Jeffrey Tucker. Good to speak with you. It's my pleasure. Thank you.