My second child was born in August 2025, and the government gave her over $1,000,000.

Sort of.  The child was born a few weeks after President Trump’s One Big Beautiful Bill was signed into law.  The OBBB creates 530A accounts, also known as Trump Accounts, which are tax-advantaged accounts the federal government seeds with $1,000 for any child born between January 1, 2025 and December 31, 2028.  The accounts can receive up to $5,000 per year in contributions, including from parents’ employers.  All investments have to be index funds.  At 18, the account is treated as an IRA, which means withdrawals are taxed as income but penalized if taken before the age of 59 ½. 

How much is that $1,000 worth?  If we assume a 10% nominal return (the historic average is 9.8%), then by the Rule of 72 the $1,000 will double approximately every 7 years.  If my child retires at 70, that is 10 doublings.  Since 2^10=1024, every $1 today will equal $1,024 in 70 years.  In other words, the $1,000 will be worth approximately $1,024,000 when my infant retires.  Over $1 million just for being born – incredible!

Because of inflation, $1,024, 000 in 70 years is much less powerful than that much now.  If we instead assume a 3% inflation rate, the investment earns a 7% return in today’s dollars.  That growth equates to a doubling every 10 years.  If my child retires at age 70, that is 7 doublings.  Since 2^7 = 128, every dollar invested today is worth $128 in today’s dollars.  In other words, my kid will have approximately $128,000 in today’s money at retirement thanks to the OBBB.  $128,000 just for being born – still incredible!

One could of course quibble with these numbers.  For example, since 1960, the US has experienced an annual inflation rate of about 3.8%, according to WorldData.info.  Over longer timeframes, the average is below 3%.  Assuming a 10% investment return could also be too high or low, depending on how you choose to invest the $1,000.  The NASDAQ Composite, which is tech heavy, has returned just over 13% since 1971.  If that performance continues for another 70 years, $1000 invested in it will be worth over $1 million in today’s money when my child retires. 

These extrapolations emphasize the power of compound returns.  I am aware of no other opportunity for an individual to realize the fruits of 70 years of compound interest.  I also would be surprised if any other American policy has a 128x return on investment.  When evaluating returns to policies such as childhood education, policing, federal research and development, and so on, the returns are rarely greater than 2, and a 5x or 8x return is considered exceptional.  Whatever your opinion of the current government, a policy that returns 128x its money directly to individuals should be praised from the rooftops.