President Trump has proposed giving “each American” a check for two thousand dollars ($2,000). Well, not “each” American. Top earners will not be included, so instead of each of the three hundred and thirty three million Americans getting a check, only around three hundred million will receive this manna. Let’s put some math to these numbers. (Note to reader: These budget numbers can be found at the website of the Committee for Responsible Government)
The Proposed Rebate Increases the Deficit by One-Third
Let’s do the math. Three hundred million Americans multiplied by two thousand dollars equals six hundred billion dollars ($600 billion) in total rebates or an additional one-third to the projected federal budget deficit for fiscal year 2025. That current deficit is one point eight trillion dollars ($1,800 billion). So, the additional outlay will result in a two point four trillion dollar ($2,400 billion) deficit.
Prior to the president’s Big Beautiful Bill, tariff and customs revenue averaged about six billion dollars ($6 billion) per month. That number has now increased to around thirty billion dollars ($30 billion) per month for an increase in annual tariff income of around two hundred and eighty-eight billion ($288 billion) per year. So, the president has given back to Americans about two years’ worth of additional tariff income from his Big Beautiful Bill.
This increase in the federal deficit will not be funded by honest borrowing in the bond market. Perish the thought! It will be funded by printing money out of thin air, as would any counterfeiter. Expect prices to rise even faster, which actually is the dollar losing purchasing power faster, and the crackup boom (a favorite term of the great Austrian School economist Ludwig von Mises) to be hastened forward. In other words, this cockamamie payment just ads fuel to the dollar bonfire.
Trade Restrictions, Taxing, and Spending Are the Province of Congress
Frankly, it’s hard to see any kind of long term, strategic vision in the president’s tariff and rebate check policies. These initiatives were not discussed in Congress, allowing the public to learn the “whys and wherefores” of the proposal and the arguments for and against. Rather, it has become routine for the president to announce big policy initiatives with no prior public discussion whatsoever. Regrettably the president has championed tariffs all his adult life. (I saw a video from decades ago of a young Donald Trump railing against foreign governments for manipulating their currencies and instituting trade interventions such as tariffs, quotas, and subsidies to favored industries. He claimed that these interventions harmed Americans and that if he were president he would retaliate. You can’t get any clearer than that!)
Trade Restrictions Are Illogical
I will not go into the illogic of such arguments except to point out that ALL trade restrictions and interventions rebound to the detriment of the country that initiates them. We cannot force foreign countries to buy our goods, and we should not prevent our citizens from buying imported goods. Unilateral free trade should be our default position, not fair trade (whatever that is), or using trade to reward or punish other nations as if we were some great Solomon. Let us end on the confident note that free trade leads to peace and prosperity.
© Patrick Barron 2025 Website
