Tariff Dividend Checks For Dummies (Who Run America's Policy Debates)
President Donald Trump
I learned basic arithmetic skills in third grade. I wasn’t exceptional, everyone in my public school third grade class learned them. Of course, we all can now use computers to have calculations done for us in a fraction of a second. But still somehow, we have major national debates that show zero understanding of even the most basic arithmetic.
The latest example is the $2,000 tariff dividend check that Trump is promising us. The arithmetic here is about as simple as it gets. We have roughly 340 million people in the country. Let’s say 10 percent don’t get the check because they meet Trump’s category of “high-income.”
That leaves over 300 million people getting Trump’s $2,000 checks. That comes to more than $600 billion. Trump’s tariffs are raising around $270 billion. That means we will be paying out $330 billion more in Trump tariff dividend checks than he is raising in tariff revenue. That is adding $330 billion to the deficit. That is from the same guy who is making an obsession of paying down our national debt.
And just to be clear, we were already looking at a budget deficit for 2026 of $1.8 trillion. If we add $330 billion, the deficit for the fiscal year will be $2.1 trillion. To put this in simple language that even a reporter for a major national news outlet can understand, Trump is proposing to add $2.1 trillion to the debt in 2026, he is not paying it down.
I acknowledge not being a deficit hawk and am not terrified by a deficit of this size, which is roughly seven percent of GDP. But I suspect most of the politicians in Washington are, and certainly anyone who thinks we need to be paying down the debt should be screaming bloody murder.
But watching the reaction in major media outlets, there seems almost no appreciation of the fact that Trump was floating what would ordinarily be considered a very large increase in the deficit. In fact, if Trump were to give this tariff dividend check every year over the next decade, it would add close to $4 trillion to the debt (counting interest payments), almost as much as the big tax cut Congress approved earlier this year.
It’s also worth comparing Trump’s tariff dividends to other items in the news. The government shutdown was in large part over the $35 billion in annual payments for enhanced subsidies for people buying insurance in Obamacare exchanges. Trump and Republicans in Congress claimed that we didn’t have the money to pay for these subsidies. Trump’s tariff dividend checks would cost more than 17 times as much as the enhanced insurance subsidies.
To make another comparison, Trump saved us around $6 billion a year by shutting down PEPFAR, the program that has saved tens of millions of lives by treating people in Africa for AIDS. This means that Trump’s tariff dividend checks will cost us 100 times as much as the AIDS program that he said we couldn’t afford.
And just to throw in one more comparison, the annual appropriation for public broadcasting was $550 million. Trump’s tariff dividend checks would cost more than 1000 times as much as the government’s payments for public broadcasting.
People can differ in their views on how important it is to save lives in Africa or provide people here with healthcare. They may also differ in their assessments of how important deficits are, but it really would be good if media outlets could make knowledge of third grade arithmetic a job requirement for reporters who deal with budget issues. It should be their job to provide meaningful information to the public on the topic. Letting someone talk about $2,000 dividend checks, and also about paying down the debt, is a sick joke.
Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack.
Reprinted with permission from Dean Baker.
- Trump floats $2,000 tariff 'dividend' that Bessent says could come via ... ›
- Trump floats giving Americans cash for health care and tariff dividends ›
- Tariff dividend: What Trump is again saying about possible 2025 ... ›
- Tariff rebate checks may sound awesome but they could be 'quite ... ›
- Trump again promises $2,000 tariff dividend as SCOTUS decision ... ›
- Trump says he'll issue $2,000 tariff dividend to all except 'high ... ›
Start your day with National Memo Newsletter
Know first.
The opinions that matter. Delivered to your inbox every morning
