This morning, on Truth Social, President Trump teased the idea of a “tariff dividend” that would benefit most Americans:
Trump is right that the economy is doing well, inflation is low (although the cost of living is not actually declining), the stock markets are high–too high, most believe–and the tariffs are bringing in money. As for “trillions of dollars,” however, that is delusional unless Trump is counting the foreign investment in America that is part of trade deals he has negotiated. Even with that assumption, “trillions” is optimistic to say the least.
The New York Post has more:
Trump provided no details on who exactly would be eligible, or when the payments might go out.
But [Treasury Secretary Scott] Bessent explained to ABC’s “This Week” on Sunday that the tariff dividends might not be direct payments.
“The $2,000 divided could come in lots of forms,” Bessent said. “It could be just the tax decreases that we are seeing.”
That is, mostly, the continuation of the tax rates that have been in place since Trump’s first term.
Do the numbers add up?
Treasury Secretary Scott Bessent said he expected the US to collect $500 billion or more in tariff revenue per year.
For context, a pandemic-era proposal to send $2,000 checks to families was estimated to cost some $464 billion, according to the CRFB.
If the federal government literally sent $2,000 to every person in the United States, it would amount to something like $680 billion. But, of course, Trump also said that “high income people” wouldn’t get money. So that would take it down to around the $500 billion that Bessent says we will bring in annually through the tariffs. Unless, that is, the Supreme Court strikes most of them down.
All of that said, what is going on here is politics, not economics. If the administration can do something to dramatize to voters the benefits we are seeing from his economic policies, it is probably for the best.
