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Newsweek
a minute ago
- Newsweek
The Right Keeps Getting Social Security Disastrously Wrong
As Yogi Berra put it, "it's tough to make predictions, especially about the future." He could have added, "and especially in politics." Still, there's a pretty good chance that one of the most significant moments for next year's election just happened a little over a week ago, in a little-noticed remark from Treasury Secretary Scott Bessent. He was filmed at a private event saying that the Republican budget's new "Trump Accounts"—savings vehicles for children—would be a "backdoor for privatizing Social Security." Well, there's three and a half seconds of political dynamite. And it's equal parts tone deaf, revealing, and misguided. Tone deaf because Americans have been screaming at politicians for decades to keep their damn hands off Social Security. Every attempt to mess with the program has backfired—most notoriously in the case of President George W. Bush's effort to privatize the program in 2005, which instantly took ten points off his approval rating and set the stage for his political downfall. Americans treat Social Security like a family member: whatever quibbles they may have, they freak out if anyone else dares criticize it. That's why voters from both parties simultaneously tell pollsters that they're only moderately satisfied with Social Security, but overwhelmingly and angrily oppose any suggestion of cutting benefits. ABU DHABI, UNITED ARAB EMIRATES - MAY 16: U.S. President Donald J. Trump speaks during a US-UAE Investment Forum alongside U.S. Secretary of the Treasury, Scott Bessent (R) at Qasr al-Watan, presidential palace of the... ABU DHABI, UNITED ARAB EMIRATES - MAY 16: U.S. President Donald J. Trump speaks during a US-UAE Investment Forum alongside U.S. Secretary of the Treasury, Scott Bessent (R) at Qasr al-Watan, presidential palace of the United Arab Emirates, on May 16, 2025, in Abu Dhabi, United Arab Emirates. MoreRevealing because Bessent knows all of this and said what he said anyway. He's no dummy; he knows the political history here, knows the polling even among Republicans, and knows that because Social Security is "the third rail of American politics" (i.e., touch it and you're dead), his boss President Donald Trump has had to promise repeatedly to leave it alone. So why do this? Because the right-wing powers behind the throne have long harbored ambitions to crush Social Security, and when he got in front of an elite right-wing audience at a Breitbart event, he copped to what they so desperately want, despite the peril. Like the parable of the scorpion and the frog, they can't help it—it's in their nature. Misguided because Trump Accounts are actually a terrible way to privatize Social Security—if that's the goal here—or even to encourage more savings. There have been plenty of proposals from both parties over the years to have the federal government kick in money to jump start people's savings. That's a pretty good idea. But Trump Accounts are shockingly thin gruel: even under rosy assumptions, the amount the government kicks in would only turn into about $4,000 after 18 years, would go only to babies born in a narrow four-year window through 2029, and would rely on parents knowing how to sign up—meaning very few would, especially among lower-income households. Obnoxiously, the accounts do offer tax benefits for wealthy households, who tend to find out about programs like this and have the means to contribute more. According to the nonpartisan Tax Foundation, these accounts are just a weaker version of existing tax-preferred accounts, and will mostly help families who are already well off. It's true that Americans don't save enough—we put away only about a third as much as people living in the Eurozone. But these accounts clearly won't fix that problem, let alone create meaningful retirement nest eggs. And this is what the Trump administration is dangling to get people to suddenly change their minds about Social Security privatization? Bessent's remarks were doubly misguided because the entire idea of pushing private accounts as a Social Security substitute deliberately and insidiously distorts the whole purpose of Social Security. Here's the key thing the Right intentionally gets wrong: Social Security isn't a savings program. It's an insurance program. It's insurance against being poor in old age. And it's incredibly good at doing that: without it, 37 percent of seniors would live in poverty right now. With it, the figure is only 10 percent. Savings are a great way to have resources for the future. Insurance is a great way to deal with the risk of something bad happening despite your best efforts to have resources for the future. Social Security is designed to provide security—to be there in addition to your savings if they're not enough. Replacing it with private accounts is like telling people that there won't be any home insurance anymore, so they should save a lot more in case their house catches on fire. Good luck with that. Again, Bessent is a smart economist, and George W. Bush's administration was also full of clever economists. They understand what Social Security really is. Their conflation of Social Security with savings is calculated to confuse: they're just muddying the waters to try to hide the sheer unpleasantness of their plans lurking under the surface. So, yes, predictions often go wrong. But Americans have seen through this muck before. And Social Security is still one of their top concerns. Here's betting that we haven't seen the last of this moment by a long shot. Matt Robison is a writer, podcast host, and former congressional staffer. The views in this article are the writer's own.
Yahoo
29 minutes ago
- Yahoo
Trump Pushes China to Quadruple U.S. Soybean Buys -- Markets React Ahead of Tariff Truce Deadline
Soybean futures posted their biggest intraday gain in four months after US President Donald Trump called on China to quickly quadruple its purchases of American soybeans, linking such a move to narrowing the trade gap between the two countries. The comments, made on Truth Social just one day before the current tariff truce is set to expire, came with a public thank-you to Chinese leader Xi Jinping, though no further detail was provided. The timing is notable US farmers are only weeks away from harvest, when fresh supply typically boosts export potential. While China bought more than $12 billion in US soybeans in 2024, government data show no bookings yet for the new season beginning in September, a sign that trade tensions remain an obstacle. Warning! GuruFocus has detected 5 Warning Signs with NVDA. The market reaction was swift. Chicago soybean futures jumped as much as 2.8% before easing to a 2.3% gain, with corn and wheat prices also edging higher. Analysts point out that this period often marks a shift in China's buying toward Northern Hemisphere origins, but the current pattern has leaned heavily toward Brazil, Argentina, and other South American suppliers. The US Department of Agriculture is expected to raise its domestic harvest outlook in an upcoming report, potentially adding to export competitiveness. Still, some market watchers caution that without progress in trade talks, China could meet its annual soybean needs entirely from South America, leaving US farmers sidelined. The tariff truce deadline on August 12 adds another layer to the story, with signals from Washington that an extension is possible. Broader US-China tensions remain in play from Beijing's defense of Russian oil imports against US tariff threats to state-linked criticism of Nvidia (NASDAQ:NVDA) chip performance. For now, Trump's remarks have injected a dose of optimism into agricultural markets, but whether this translates into sustained buying from China could depend on the trajectory of negotiations in the weeks ahead. This article first appeared on GuruFocus.
Yahoo
29 minutes ago
- Yahoo
Nvidia is willing to pay the US government $3 billion to save its business in China
Nvidia (NVDA) has reportedly cut an unprecedented deal with the Trump administration to save its China business that would entail sharing as much as $3 billion in revenue with the US government for the current fiscal year to resume sales of its H20 chips. Multiple media outlets have confirmed with unnamed sources that leading AI chipmaker Nvidia and rival Advanced Micro Devices (AMD) cut deals with President Trump to fork over 15% of their revenues from China in exchange for export licenses, following an initial report of the news from the Financial Times. Trade policy experts cited by the Washington Post said the deals amounted to blackmail and violated the US Constitution's ban on export taxes. Nvidia did not confirm its new arrangement with the Trump administration but a spokesperson told Yahoo Finance: 'We follow rules the U.S. government sets for our participation in worldwide markets. While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide.' Nvidia stock fell fractionally Monday while AMD shares pared initial losses to trade flat. China is one of Nvidia's most important markets, accounting for 13% of the company's revenue in its prior fiscal year. Nvidia has repeatedly introduced new, lower-power chips to sell to China in the face of tightening US export controls, as the government has cited national security concerns. The chipmaker began sales of its H20 chips — graphics processing units based on its prior-generation Hopper architecture — in 2024. Nvidia got hit with a surprise ban on exports of its H20 chips to China by the Trump administration in April, costing the company billions in lost sales and sending the stock spiraling. The ban was later reversed in July, drawing national security concerns from lawmakers worried over China's development of AI. Wall Street analysts projected that Nvidia would recoup $15 billion in lost sales in the second half of the year after the ban was lifted to hit about $20 billion in revenue from China for its fiscal year 2026, which ends next January — meaning the US government could get $3 billion from its deal with the company. Bernstein analyst Stacy Rasgon said Nvidia making some revenue from China is better than none: 'At the end of the day we believe it is better to allow NVIDIA (and AMD) to sell AI into China, as failure to do so effectively hands the Chinese AI market over to Huawei, and encourages the coalescence of Chinese developers around Huawei's architecture and ecosystem (undesirable).' Huawei is the Chinese tech giant developing chips to rival Nvidia's H20 ones. Nvidia has argued that export controls leave room for Chinese rivals to advance. Rasgon noted that it's unclear whether Nvidia's new revenue sharing agreement with the US covers only its H20 chips or if it also covers its new chips based on its latest Blackwell architecture designed for the Chinese market unveiled in July. Nvidia expects China to transition to buying Blackwell-based products Nvidia is developing to comply with export controls, Rasgon said. Still, DA Davidson analyst Gil Luria said the new deal could end up 'encouraging China to move away from buying its chips from American companies and focusing more on domestic suppliers such as Huawei," because the Chinese government wouldn't want companies effectively handing over money to the US government. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @ Email her at
