Treasury Secretary Scott Bessent recently drew a direct line between the rising skepticism of capitalism among young Americans and their limited participation in the stock market. Speaking from the Treasury Department’s Trump Accounts Summit in Washington, Bessent posited that the prevailing sentiment towards socialism is inextricably tied to whether individuals hold equity stakes. This perspective emerged during an interview where CNBC’s Sara Eisen questioned him on a Gallup poll indicating that 39% of Americans view socialism favorably, compared to just over half who look positively upon capitalism.
Bessent quickly connected these attitudinal figures to financial realities, noting that approximately 38% of American households currently possess no exposure to equities. He suggested that those not invested in the stock market are more inclined to express dissatisfaction with the prevailing economic model. The administration’s response, as framed by Bessent, involves a concerted effort to cultivate a new generation of capitalists through initiatives designed to give young people a direct ownership stake in corporate America’s ongoing growth. This approach seeks to reshape economic perspectives by fostering personal investment.
The Philadelphia Fed, in a September 2025 report, corroborated the broad scope of non-participation, finding that roughly 57.2% of American households do not invest in the stock market at all. This significant segment of the population forms the backdrop for the administration’s new “Trump Accounts” initiative. These federally supported investment programs for children are central to Bessent’s strategy for altering these figures. The accounts are structured to channel contributions into a broad-based index fund, aiming to introduce millions of future adults to the long-term compounding power inherent in equity markets.
Bessent articulated the program as a component of President Donald Trump’s “enduring legacy,” placing it alongside diplomatic peace deals, international trade agreements, and tax reforms. He highlighted that children born between 2025 and 2028 would see their Trump Accounts compound for an impressive 18 years. Such extended exposure, he argued, would not only generate wealth but also significantly enhance financial literacy for the next generation. Referring to it as a “real-time learning experiment,” Bessent expressed optimism that such widespread participation would lead to dramatically different survey results regarding economic sentiment within five to ten years.
These discussions unfold against a robust market backdrop, with the S&P 500 index frequently reaching new highs, having posted three consecutive years of double-digit gains and recently touching the 7,000 mark. Bessent attributed these strong returns to “good policies for sound economic growth,” citing deregulation, tax adjustments, and a pro-investment environment that he believes has attracted “trillions of dollars of investment” back into the United States. While acknowledging that markets are inherently volatile and past performance offers no guarantee of future returns, he maintained that “events and policy” would ultimately dictate future outcomes. The administration’s underlying gamble appears to be that increased youth investment will lead them to view market fluctuations as an inherent feature of a beneficial system, rather than evidence of capitalism’s shortcomings.
It is important to consider that correlation does not equate to causation, and various surveys have indicated that young adults might theoretically embrace “free enterprise” while simultaneously growing disillusioned with capitalism and large corporations. This suggests their views might stem from how the system functions in practice, rather than solely from their stock ownership status. For instance, an individual might be a non-investor due to low wages, substantial debt, or unaffordable housing—structural conditions that could push them toward alternatives to the existing economic framework. Furthermore, even when “America owns stocks,” the gains are often highly concentrated, meaning a higher number of accounts does not automatically translate to widespread benefit. Analyses consistently show that the top 10% of households control the vast majority of stock value, with lower-income and younger households holding significantly less in dollar terms. Consequently, providing every child with a small index-fund stake may not fundamentally alter who truly controls corporate America or who captures the lion’s share of the economic upside.
Moreover, the term “socialism” itself is often interpreted broadly. Polling suggests that young Americans frequently use the term to advocate for stronger social safety nets, universal healthcare, and robust checks on corporate power, even while still endorsing free enterprise and entrepreneurship. The core issue might not be a lack of ideological commitment to capitalism, but rather significant barriers to participation, including low incomes, student debt burdens, the absence of employer-sponsored retirement plans, and insufficient emergency savings. When individuals are living paycheck to paycheck, rationally avoiding stock market risk becomes a necessity, and their skepticism toward the system could well originate from feeling excluded, rather than from an ignorance of compounding returns. The reported interest among Generation Z in prediction markets like Polymarket and Kalshi, alongside their enthusiasm for cryptocurrency, further highlights a perception of being locked out of traditional stock markets. For Scott Bessent, however, the near one-to-one relationship between favorable views of socialism and a lack of stock market exposure is more than a mere statistical alignment; it represents a significant political and economic challenge that he believes the Trump Accounts are specifically designed to address. The aim is to convert non-investors into shareholders, thereby, in his words, transforming a generation that might be exploring socialist ideas into one that possesses a tangible stake in capitalism. Whether nudging more young Americans into index funds will be sufficient to overcome deeply entrenched structural issues such as wage stagnation, high housing costs, or concentrated corporate power remains an open question.
