Checks made out to Americans to the tune of $1,000-$2,000 may be on the horizon, President Donald Trump said recently in an interview with far-right television network One America News.
But experts say the checks would likely be inflationary.
“It could kind of be a weird feedback loop where the tariff stimulus justifies passing on more tariff costs,” Chris Motola, financial analyst at National Business Capital, a business loans marketplace and financial services company, told Fortune.
However, if this month’s inflation or jobs reports, which are delayed due to the government shutdown, point to an economic shift, then tariff-revenue checks could suddenly “start looking a lot better and less inflationary,” he added.
Paul Johnson, an adjunct professor of value investing at Fordham’s Gabelli School of Business, told Fortune, instead of putting money from the checks into their savings, consumers will likely do what they do best: spend.
If consumers were “rational economic agents,” they would put tariff-revenue checks into savings, he said. “But the odds are high that they’ll turn around and feel like it’s free money.”
The extra money from potential tariff-revenue checks could offset consumers’ tariff strain, but government-issued checks like these are historically used to encourage spending, an inflationary fiscal policy, Johnson added.
A White House official told Fortune: “Given that we have yet to unveil any official plan to that effect to be properly analyzed, these economists are speculating based on unsubstantiated assumptions about hypothetical policymaking.”
A different economy
While Trump has previously linked Biden-era pandemic stimulus packages sent out under the American Rescue Plan Act of 2021 to increased inflation, Motola said tariff-revenue checks could have a similar, but weaker, effect.
Under Biden’s ARPA, adults whose adjusted gross income was less than $75,000 per year, or couples who filed together whose adjusted gross income was less than $150,000 received $1,400 for each adult, plus $1,400 for each dependent—no matter how old they are. So were heads of households who made less than $112,500.
Though Trump hasn’t outlined a plan for tariffs revenue checks, he floated a tariff-funded ‘dividend’ or distribution for low- and middle-income Americans in August.
The notional $1,000- $2,000 tariff-revenue checks may be comparable in dollar amount to Biden’s stimulus checks, but Covid dollars and today’s dollars are much different due to the high inflation that’s occurred in recent years, outpacing wage growth.
This means real, inflation-adjusted purchasing power has declined for average Americans. Their dollars don’t go as far as they used to, so inflationary effects of a new round of checks would be lower by comparison, Motola said.
Still, instead of an economically-sound repayment to the American people, adjunct professor Johnson sees the mention of tariffs-funded checks as a political move more than anything—and “a giant charade.”
“There’s no real economics here,” Johnson said.
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