U.S. Treasury Secretary Scott Bessent is drawing a sharp line between young Americans’ skepticism of capitalism and their lack of market participation, arguing that attitudes toward socialism are inseparable from whether people actually own stocks.
“I think that dovetails somewhat that 38% of American households have no exposure to equities,” Bessent said, suggesting that those who don’t participate in the stock market are more likely to be dissatisfied with the existing economic model. He framed the administration’s push for investment accounts for children as a way to “mint a new generation of capitalists” by giving young people a direct stake in corporate America’s growth.
The new “Trump Accounts” initiative, a federally supported investment program for children, sits at the center of Bessent’s effort to change those numbers. The accounts, he said, are designed to channel contributions into a broad-based index fund, with the goal of exposing millions of future adults to the long-term compounding power of equity markets.
Bessent cast the program as part of President Donald Trump’s “enduring legacy,” alongside peace deals, trade agreements, and tax cuts. Children born between 2025 and 2028 would see their Trump Accounts compounding for 18 years, he noted, arguing that such long-term exposure will create both wealth and financial literacy for the next generation. “This is a real-time learning experiment,” he said. “We’re going to shoot to get everyone a stake in the great innovation in our country, in the economic engine, and I bet if we do this survey in five, 10 years, we’ll have drastically different results.”
At the same time, he acknowledged that markets fluctuate and that past performance does not guarantee future returns, emphasizing that “events and policy” will determine what comes next. Still, the administration is clearly betting that if more young Americans have money in the market, they will see volatility as a feature of a system that ultimately benefits them, rather than as proof that capitalism is failing.
Also, it’s unclear what people mean by “socialism.” Polling finds young Americans often use the term to signal support for stronger safety nets, public healthcare, and checks on corporate power, while still endorsing free enterprise and entrepreneurship. Perhaps the problem is not a lack of ideological commitment to capitalism, but barriers to participation: low incomes, student debt, lack of employer retirement plans, and thin emergency savings. If people are living paycheck to paycheck, they may rationally avoid stock risk, and their skepticism toward the system stems from feeling locked out, not from ignorance of compounding returns. Gen Z reportedly turns to prediction markets such as Polymarket and Kalshi, and are enthusiastic about crypo, because they feel locked out of the stock market, for instance.
For Bessent, the nearly one-to-one relationship between the share of Americans with favorable views of socialism and the share with no stock exposure is more than a polling coincidence. It is a political and economic problem he believes the Trump Accounts are designed to solve—by turning non-investors into shareholders, and, in his words, turning a generation that flirts with socialism into one that owns a piece of capitalism. It remains to be seen whether nudging more young Americans into index funds will be enough to overcome structural problems such as wage stagnation, high rents, or concentrated corporate power.
For this story, Fortune journalists used generative AI as a research tool. An editor verified the accuracy of the information before publishing. This report has been corrected with regard to a human error about the Philadelphia Fed survey’s findings.
