This is a topic that keeps being brought up by various members of the Trump administration: The notion that tariff income from President Trump’s tariffs has been robust enough to support a $2,000 rebate check for all Americans under a certain, unnamed income level. (I’ve seen a household income of under $100k kicked around as the top end.) Most recently, on Wednesday, Press Secretary Karoline Leavitt, in a reply to a question from a reporter, assured the White House Press Corps that something like this was in the works. Watch:
Here’s the exchange:
Question: (President) Trump has talked about sending a $2,000 check to U.S. citizens. Earlier this year he talked about a DOGE dividend. That didn’t materialize. Should U.S. citizens expect a $2,000 proposal, is the White House committed to making that happen?
Press Secretary Leavitt: The White House is committed to making that happen. And we are currently exploring all legal options to get that done. I don’t have a timeline for you or any further details. But I can confirm for you that the president made it clear, he wants to make it happen, and so his team of economic advisers are looking into it, and when we have an update, we’ll provide one.
Like a bad penny, this idea just keeps coming around.
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Here’s the thing: We don’t need $2,000 rebate checks. Oh, they would be a great short-term boost to a lot of people, especially younger people. Our younger kids, who have not been able to afford to buy a home yet, would immediately sock this four-figure check into their down-payment savings, and it would put them a few months nearer their goal. And, let’s be honest, plenty of people would like to have a sudden $2K influx, and President Trump is no more immune to the temptation to buy votes than any other politician.
All the same, he shouldn’t do this. Here’s why, and I’m going to tell you.
There are 38 trillion reasons to use this money for something else, something far more compelling, something that poses a very real economic danger to the United States: Our horrible, out-of-control national debt. President Trump has mentioned this, but only as a seeming afterthought to the rebate idea.
Trump brought up the tariff rebate idea over the weekend and again on Monday.
“All money left over from the $2,000 payments made to low and middle income USA Citizens, from the massive Tariff Income pouring into our Country from foreign countries, which will be substantial, will be used to SUBSTANTIALLY PAY DOWN NATIONAL DEBT,” Trump wrote in a social media post.
One group has an estimate as to what this would cost, based on the equally unnecessary 2020 COVID payments:
Trump provided no details, but at least one group has already worked up an estimate.
The Committee for a Responsible Federal Budget said the math doesn’t work for Trump’s proposal, according to its analysis. The group said that if the payments were structured like the COVID-19 stimulus payments, the $2,000 dividend would cost about $600 billion, which is about twice as much as tariffs are expected to generate this year.
“Current tariffs have raised about $100 billion so far, and will raise about $300 billion per year in the steady state,” CRFB noted. “If paid annually, dividends would be twice as expensive as tariffs.”
So, the distribution would cost about two years of tariff income, at current levels. But as compared to our debt? Let’s apply some math: If we assume $300 billion per year, if we assume the best-case scenario in which Congress stops deficit spending immediately (and if that doesn’t cause you to do a spit-take, I have no idea what might), that means that if every penny of the tariff income was applied to the debt, it would take over 120 years to pay down just the $38 trillion that is the balance right now. Look at this, and you’ll see that this balance is running away; it may well take thousands of years to catch up, even if we apply all the tariff money to the debt.
In fact, we’ll probably never catch up. We are almost certainly past the point of no return here.
It may be tempting, then, to hand the American people some cash, to gain some short-term benefit. But the federal government is going, sooner or later, to have to start to learn some fiscal discipline. If that means telling the American people, “Sorry, folks, but the debt comes first,” then that’s what President Trump should do.
After all, when you’re this deep in a hole, the first thing one must do is to stop digging. Dealing with this debt catastrophe will require one of three things: Grow our way out of it, which is 1) the best course and 2) the one that President Trump seems to be trying. Or, we can inflate our way out of it, leading to a Weimar Republic-type situation. Finally, we can just repudiate the debt, which would likely plunge the world into economic chaos.
Holding off on these payments may be largely a symbolic gesture. But it’s a gesture worth making. Get the country in the black — then we can start talking about rebates.
Editor’s Note: After more than 40 days of screwing Americans, a few Dems have finally caved. The Schumer Shutdown was never about principle—just inflicting pain for political points.
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