Opinion · Behavioral Economics
Sixty million children in the U.S. now have an investment account in their name. Almost none of their parents signed up for it. And for many of those children, the balance is still zero dollars.
That is the odd shape of Trump Accounts, which the Treasury opened automatically on October 1. The account is the default. The money is not. This piece looks at why some people see the claim step as a fair price, and why others see it as a quiet wall.
What is actually being discussed?
- On October 1, 2026, the Treasury said more than 60 million children under 18 with a Social Security number had been automatically enrolled in Trump Accounts.
- The new accounts start out “unclaimed.” They begin with no balance, and parents cannot choose investments until they claim them.
- To claim, a parent uses the Trump Accounts app to verify their identity, confirm their link to the child, check the details and accept the terms.
- Children born from 2025 through 2028 can get a one-time $1,000 from the government, but only after a parent claims the account.
- Before auto-enrollment, roughly 6 to 8 million children had been signed up by their parents.
Sources: U.S. Treasury, Money, InvestmentNews
A half default is still a default
Behavioral economists call this the default effect. Whatever happens when people do nothing is what most people end up with. So if you want more people in a program, you make joining the thing that happens when nobody acts.
Trump Accounts use that idea, but only halfway. The government made the account the default. It did not make the money the default.
When I first read the headline, my reaction was simple. It still counts as enrollment. The account exists, and the child has a place for money to land. Opening it was the hard part, and the government did it.
The question is what to make of the second half, the step that still needs a parent.
There is already a hint of how that step behaves. Before October 1, roughly 6 to 8 million children had been signed up by parents who went looking. That is the group that acts without a push. The other 60 million accounts now wait to see how many parents act with one.
Why a free benefit can ask for one tap
Here is the view I find most natural. The government is handing out money, and money paid without checks gets misused. Asking a parent to prove who they are before $1,000 moves is basic care. A free benefit can ask for a little effort. The government is not an ATM.
There is real evidence behind that instinct. During the pandemic, states rushed to pay unemployment benefits. The Government Accountability Office estimated that $100 billion to $135 billion of those payments were fraud, about 11 to 15 percent of the total. The report tied the risk to the pressure to pay quickly.
The psychology here is about fairness as much as fraud. Many people feel a benefit should go to someone who at least showed up for it. A small step makes the money feel claimed, not dropped from the sky. To people who think this way, removing every check looks careless, not kind.
Why the same tap can look like a wall
The other side does not argue for handing out money blindly. Its point is about who drops off at each step.
Researchers Pamela Herd and Donald Moynihan call these hurdles administrative burden. It comes in three kinds: learning that a benefit exists, doing the paperwork and the stress of dealing with the system. Their work suggests these costs fall hardest on families who are already stretched. The economist Richard Thaler, who helped make “nudge” a household word, coined a blunter term for this friction: “sludge.”
The idea is that every extra screen loses a few people. Most of them are not refusing the benefit. They simply run out of time, attention or patience before the last step.
Herd also points out that Social Security retirement, one of the least burdensome U.S. programs, has very low fraud. In that view, checks and ease do not have to fight each other.
Seen from here, an app-only claim step filters by who has time, a smartphone and enough trust in the system. Those may not be the families who need $1,000 most.
What 401(k)s, Britain and Australia learned about defaults
Defaults have been tested before, under very different rules. Each case shows a different part of the pattern.
401(k) plans: people stay where they are put
In a well-known 2001 study, Brigitte Madrian and Dennis Shea followed a company that switched its retirement plan to automatic enrollment. Among newer workers, participation jumped from 37 percent to 86 percent.
But 76 percent of the auto-enrolled workers also stayed at the default 3 percent contribution rate. Very few earlier workers had picked that rate on their own. The authors suggested two reasons. Inertia was one. The other was that workers read the default as quiet advice from their employer.
A default gets people in the door, and then it quietly decides how far they go.
Britain’s Child Trust Fund: the money arrived, the people didn’t
The U.K. tried a version of this from 2002 to 2011. Each child got a £250 voucher, or £500 for low-income families. If parents did not use it within a year, the tax office opened an account anyway, according to Which?
That is a full default, with money and all. Yet more than 750,000 of these accounts now sit unclaimed, holding about £1.5 billion. Putting money in automatically did not mean anyone knew it was there.
Australian super: the default worked a little too quietly
In Australia, employers pay retirement savings, called super, into a fund for workers. If a worker does not choose a fund, the money goes to a default.
Many workers never find out where that default sent their money. In 2024, the Australian Taxation Office said it was holding A$17.8 billion in unclaimed super, often because people had moved or changed jobs and lost track.
The claim step also tells parents the account exists
Put these cases side by side and one thing stands out. A default is very good at starting something. It is much weaker at making people notice.
The 401(k) workers stayed at 3 percent because they never looked again. British families never learned about money that was already theirs. Australian workers lost track of billions in funds they never picked.
I have been on that side myself. At a past job, I left the retirement fund line on my contract blank, so my pay went into the fund my employer used by default. I didn’t learn which company held my money until years later, when I closed the account.
One way to read the Trump Accounts design, then, is that the claim step does two jobs. It checks who is getting the money. It also forces a moment where a parent learns the account is real. A fully automatic $1,000 might have joined Britain’s unclaimed pile.
That does not settle the argument. It only moves it. If the claim step is how parents find out, then whether it is fair depends on whether the news reaches them. A parent who never hears about the app has not refused anything. They have simply never been asked.
Two things to ask about the next “automatic” program
Programs like this will keep coming, from savings accounts to tax credits. The word “automatic” will usually appear in the headline. It is worth asking which part is actually automatic.
The 401(k) study is a useful warning here. People treat a default as a recommendation, so “automatic” can sound like “already taken care of.” Sometimes it is. Sometimes only the first step is.
First, does the money move on its own, or only the paperwork? Second, after the default kicks in, how would the person find out? If the answer to the second question is “they would have to go looking,” the default has done half its job. Whether the other half belongs to the government or to the family is the part people will keep disagreeing about.
Related: Social Security COLA 2027: Why a 3.6% Raise Can Still Feel Like Standing Still
Editorial note: This is an opinion piece based on public reporting as of October 3, 2026. This piece looks at the psychology behind each side of the claim-step debate and does not endorse either position, nor does it offer financial advice. The featured image is AI-generated.