edition.cnn.com - Trump dividend payment tariff stimulus

“If tariffs are making Americans poorer, the simplest and fairest way to stop that is not to tariff.”
It makes no sense to tax people with tariffs – and then give people the money back in the form of checks.
Justin Wolfers, economics professor at the University of Michigan

One of the only things that polls worse than the Trump economy is the president’s almost unprecedented use of tariffs.

The White House, in an apparent bid to turn sentiment around on both the economy and tariffs, is once again floating a bold idea: redeploying tariff revenue to fund $2,000 dividend checks to lower- and middle-income Americans.

It’s easy to see how these tariff rebate payments could win over skeptical voters and help people who are struggling financially. Yet beyond the political appeal, it’s hard to make sense of the economic logic behind this idea.

Economists tell CNN that tariffs are unlikely to generate enough revenue to pay for dividend payments the size President Donald Trump has promised.

If all the tariff revenue is blown on dividend payments, there would be nothing left to chip away at the $38 trillion national debt – one of Trump’s other promises. Depending on how they are structured, dividend payments could even add to America’s mountain of debt.

If rebate checks are distributed, history shows that many Americans would likely spend some or all of their cash from Uncle Sam. This would increase demand without boosting supply, which could worsen the cost-of-living problem at the heart of Americans’ frustrations with the economy.

Jeff