Trump proposes another massive wealth redistribution scheme.
Economic Illiteracy at Its Finest
Trump on Truth Social: People that are against Tariffs are FOOLS! We are now the Richest, Most Respected Country In the World, With Almost No Inflation, and A Record Stock Market Price. 401k’s are Highest EVER. We are taking in Trillions of Dollars and will soon begin paying down our ENORMOUS DEBT, $37 Trillion. Record Investment in the USA, plants and factories going up all over the place. A dividend of at least $2000 a person (not including high income people!) will be paid to everyone
Four Trump Tariff Positions
- Use Tariffs to eliminate the deficit and pay down debt
- Use tariffs to bring production back to the US
- Use tariffs as a redistribution scheme to give everyone $2,000
- Use tariffs to pay for the damage Trump he caused to farmers
$2,000 Redistribution Math
- Total Population: 343 Million – Cost $686 Billion
- Noninstitutional Population Age 16+ of the US: 274 million – Cost $548 Billion
- Noninstitutional Population Subset: 200 Million – Cost $400 Billion
Five Questions
- Who pays the tariffs?
- Since when do Republicans cheer massive money redistribution schemes?
- How does one eliminate the deficit and pay down debt when the deficit is much larger than tariffs can bring in?
- How can tariffs simultaneously bring back production and collect money?
- How can you redistribute $400 billion minimum, plus farm bailouts, and shrink the deficit?
Five Answers
- US consumers and businesses
- Since Trump
- You don’t
- You don’t
- You don’t
Since US consumers pay tariffs, what Trump proposes is one of the biggest wealth redistribution schemes in history.
Trump wants to take tariff money (a tax on consumers and businesses) and redistribute that money to households (except the wealthy, whatever that means), and also to farmers to make up for the damages Trump caused farmers in tariff retaliations.
Q: How does this make any sense at all?
A: It doesn’t.
And while we are bailing out the farmers and redistributing money to households, many small businesses are going to go out of business because of these tariffs.
But hey, that’s OK because $2,000 will cover the cost of going out of business. Right?
What’s Trump Doing?
This is speculation on my part, but I think he is futilely trying to drum up support for tariffs when the Supreme Court rules against him on reciprocal tariffs.
Trump want to blame the court for their ruling if and when it goes against him. (Note: I have a post coming up on the Court decision regarding the odds, and the vote count by individual justices).
Of course, never discount the possibility that there is no rationale for Trump’s madness, so there’s just madness. He says or does things on whims without thinking.
This is the second major redistribution scheme since Friday. Here’s the other.
Republicans Start to Negotiate on the Government Shutdown
Earlier today I commented Republicans Start to Negotiate on the Government Shutdown, What Will Happen?
The leading GOP proposal involves sending federal money into flexible-spending accounts instead of to insurance companies.
Flexible spending accounts is the brainchild of Senate Health, Education, Labor and Pensions Chairman Bill Cassidy (R., La.)
Q: How does that work?
A: Details are scant, but essentially the government collects taxes then redistributes the money to offset proposed Republican cutbacks in Obamacare.
Arguably this is better than collecting taxes and paying health providers, but some of us propose not taxing us in the first place.
The sad irony is Republicans refused an offer by Democrats that would have genuinely been temporary with a cost of $35 billion.
Instead, they are going to get hooked into perpetually extending this deal at a cost of $350 billion. Click above link for further analysis.
Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
On March 12, I commented Lutnick Says Tariffs Can Eliminate the IRS and Balance the Budget
Lutnick: “We’re going to make the External Revenue Service replace the Internal Revenue Service.”
I ran the math on that ludicrous idea. Team Trump only needs to bring in $7 trillion in tariffs on $3.3 trillion in total imports.
Today we see Trump is not going after the deficit at all. Instead he will collect tariffs (taxes) and hand out $2,000 (minimum said Trump) to try to pay off farmers and everyone else harmed by his tariffs.
As is typically the case, the cult will cheer.
Bonus Question: How does Cassidy’s proposal differ from Elizabeth Warren’s Universal Basic Income idea?
A: It doesn’t. The money is supposedly for healthcare but money is fungible. Free money is free money (except of course it’s never free).
Final Question: Who’s the fool here?
Besides the calculations in this article Fortune.com also agrees with this in today’s main article.and cautions.Trump wants to give a bonus of $ 10000 to those in air-traffic control, who attended during Govt shut down
“(not including high income people!)” Change your article headline.
Wow, didn’t take him all that long to revert to the free candy gambit, did it?
So, $686 Billion is how much in millions?
Seriously, though, there is one ‘good’ way to pay for all of this free stuff. A 100% inheritance tax, without limit. Plus, a 50% gift tax beginning at age 65.
Flat tax of 10% with no loopholes for anyone, for anything, or any organizations including alleged churches, their corporate entities, real estate and investments.
Until churches pay taxes, the US is an unserious country
Um, your mileage may vary, but I know for a fact that my expenses over the last six months have not gone up anywhere near $2,000 for those things that are subject to tariffs. In fact, I bought a Comfortbilt HP50 pellet stove for $1,749 from Home Depot back in Sept. It’s still $1,749. They’re made in Ningbo China.
If Trump wants to give me $2,000 from all you people buying way more stuff from MX, CA, China than me, I’m cool with that.
I’m smart enough to realize that for the most part, tariffs have been taxes on corporate earnings. Inflation isn’t jumping through the roof, my costs aren’t jumping through the roof. So somebody other than myself is paying 90% of that $2,000.
I’m pointing the finger @ foreign producers, exporters & importers paying less for the goods they’re importing but paying a tariff tax to Uncle Sam. Again, I’m speaking in general terms.
We’re fools, for believing elections can make a difference when the only offerings are variants of collectivism. (I’m a fool for having voted for a particular deranged turd, but in my defense, he hadn’t had his full coming-out party until after the vote.)
Come on, John, be honest. You didn’t vote for TACO. If you did, then you had your head stuck in the sand. He’s doing EVERYTHING he said he was going to do.
Gov workers booed Trump during DC Commanders NFL game.
Are you sure it was not 70% of the people in the stadium?
I was in a college town wings bar and every time he came on TV everyone in the bar flipped him off. The vocalizations were pretty extreme!
Younger people get it ~ and they eat blueberries!
Buying votes before midterm.
He’s already got my vote, so sweet! Biden did the same thing with all the stimulus he handed out.
PLEASE!
Mr. Trump the people are not fools, you are certifiably insane. It’s way past time for 86/47 Impeach, 25th or God. WTF is wrong with America that they allow this to continue?
The senate may have reached a deal, but the deal didn’t extend Obamacare subsidies. Hakeem might kill it.
Lately Trump looks more respectful and powerful on Mish blog.
Chief Justice Roberts : Obamacare is obligatory. You must buy it. Those who refuse must be penalized, pay taxes. Obamacare became a new religion. Death to hose who insult the holy man. Chief justice Roberts converted to Obamacare.
Funny, I was under the impression Roberts thought that govt healthcare was such an important issue it should go to the people to decide. They decided in the next election.
The problem was electing Obama in the first place.
It still amuses me that his college records were never released. As if anyone really cared about his grades.
So, what was so important in those records?
One thing ONLY. He applied as a foreign student (Indonesian) because it would greatly increase his chances of admission.
Who pays for tariffs -> exporters, importers, businesses and consumers. Since tariffs are small their negative effect is small, so stop the bs. Their positive effect is huge: they protect highly pd workers, newly constructed onshore factories and trillions of new investments pouring in -> normal inflation, lower rates. Inflow, a growing cake: higher income taxes, payroll taxes and corp taxes, student loans, tariffs, fees and others. Outflow, a shrinking cake: a smaller gov, cut waste, cut dems projects, kill Obamacare subsidies, ease debt payments -> lower gov debt/ higher income -> a dynamic surplus. Trump wants to replace SNAP with a $2K bonus.
No one can be this stupid. Michael Engel has got to be a bot.
The mag7 market cap reached $22.5T. Sell NVDA, MSFT, AAPL and park in US treasuries. Have some fun in the casino. AI is not in a bubble. AI is a stem cell. AI diffuses to the military, industries, gov, the service sector, healthcare and edu. ChatGPT is a primary doc who gives referral to experts, pharma, diagnostic and preventive medicine. Instead of Obamacare subsidies give docs bonuses for promoting preventive medicine and to their patients if they stop consuming junk food, sodas, exercise, cut visceral and fat butt ..
The most major economic event this year was the decision of the British Columbia high court to give land back to the “original tribe”. Homeowners received letters saying that their property title is “affected”. British Columbia decided to abolish private property, admit it and notify the owners, property legally purchased and with taxes paid. And Mish thinks that Trump’s tweets or vague promises on tariffs are the subject of this “Economic Trends” blog.
About time. If private property is so important, then give the land back to the people it was stolen from.
You understand, I hope, that private property is an institution established by and protected by the State. The State of that area is the Canadian State. Not the tribal State, which never existed (as a State). In your logic, perhaps the Turks should give back Asia minor to the Greeks, and Germany will also cease to exist, since it’s a very newly formed country of the 19th century – among the few thousands of huge changes we have to apply if the logic of “the first who saw land claims it for eternity”.
First funny thing – the tribe is not even claiming it.
Second funny thing – the underlying securities to all these properties most likely will go to zero value (loss of trust to property titles).
Third funny thing – Canada may cease to exist as a State, if it has no land to claim as Canadian.
TMX oil pipeline and Chinese home owners in Vancouver will pay land lease fees to the tribes. The gov will collect income taxes from the tribes. Vancouver home prices will deflate.
Obama promised more than $2,000 per family via Obamacare, and his army called everyone against it a “racist”.
That didn’t work, and we can’t even get rid of it, it’s as sticky as bad hardened sludge in complex arteries.
So let’s see if the tariffs work. If they don’t, it’ll be very easy to get rid of them.
A cost savings of $2,500 for insurance. The morons you support could easily have gotten rid of Obamacare if they had written their own plan. The last time their plan was seen in public it was a huge stack blank pages.
They attempted at some point but John McCain voted against. And as I said, “it’s sticky”. It’s spread everywhere, inter-connected everywhere. The more time goes by, the more difficult it is to change it, let alone abolish it.
In Europe you can buy private insurance (in addition to your public one) just like you could in the USA before Obamacare. From very low prices, depending on coverage. In the US, you can’t. I can’t buy Obamacare, it’s too expensive.
True, nobody has a full replacement, politicians don’t understand insurance. We either go back to the previous system (which was not so bad), or we bankrupt the country with a “full public” system. European governments strongly encourage the purchase of private insurance, because it’s a relief to the public systems.
Obamacare is a new religion. Death to those who insult Obamacare.
The difference is you can not buy a public one in the US. The German government basically sets prices for medical care in Germany, and then creates and subsidizes public, non-profit insurance companies which the vast majority of Germans use. This scheme creates a modest, but fair profit for healthcare providers while providing cost-effective insurance for the population. The private insurance companies have to compete on cost which is half of what Americans are forced to pay for inferior outcomes. Obama attempted to create a public option in the German style but it was voted down by all Republicans and just enough Democrats.
Mish,
Trump’s genius is he pummels his opponents to surrender with inanities. Trump’s idiocy is he occasionally believes his inanities are good policy.
The fundamental flaw of Trump is his “principles” are small and self serving. He doesn’t believe in smaller government. He doesn’t believe in lower public debt. He doesn’t believe in free markets. He is a Big Government Socialist, albeit a pro-American Socialist who pretends to be a Capitalist but doesn’t accept the reality of financial loss.
Alas, there are few true Free Market Capitalists politicians in Washington DC and what ones exist are threatened with extinction by Trump.
And yet, Trump wins the political game because despite his many flaws he is better at the game than the other politicians. The one way to defeat Trump is to have him embrace a plan of destruction as his own – which Trump did in 2020.
Small? Nothing about Trump is small, not even his hands. Everything is “hyuuuge” in his world.
Trump has a crystal clear pattern: it is always a binary (such as his statement that the SCOTUS tariff ruling is “life or death” for the country). So, it’s always all winners or losers, etc. And it is always hyperbole, as in, “life or death,” as if existential this time, right now, though it is nothing of the kind. He just plugs in this algorithm every time. He is a classic high pressure salesman, and an incredibly obvious, crude one. Which, in the state of today’s society, seems to work enough.
Donald Trump is a fundamentally corrupt person, as are his supporters. $2000 of free money? Bring it on baby! To hell with the Republic. Just give me free stuff!
But, there is, sometimes anyway, just enough window dressing to maintain a pretense of principle. or at least righteous anger.
And the gov shutdown ends just before thanksgiving. Things that make you go hmmmm
This all works for Trump IF he really was/believes we are bringing in trillions. He truly is having trouble with math and numbers in general. We may be observing dementia in action.
It’s the circular economy theory.
I give a $1 to Joe who gives it to Karen who gives it o Jim…by the end of the day, i’s a Billion $ of GDP!
I wouldn’t worry though, Trump says foreigners are investing $17 Trillion in America, and the check is in the mail on that, guaranteed, you can count on it.
“So the deficit will be $1.8 T (or more)” – c’mon, man, what’s a few more Trillion here or there, you say that like it’s real money or something. The National Debt Clock melted down at $38 Trillion, it was spinning so fast. With the new AI assistant, The Fed can print up Trillions in seconds with one touch of the key on the laptop, or even using their new phone app. The Fed Chairman can print another Trillion while taking his morning washroom break.
Hahahaha!
This is so funny! Trump just makes up shit and his cult gobbles it all up and then asks for seconds. Like his 1500% reduction in drug prices.
Year to date we have collected $215 billion in tariffs. Certainly not “trillions” as Trump claims. And certainly not enough to do even ONE of the magical things that the administration keeps promoting, such as replacing income taxes or paying off the deficit and debt or sending $2000 bonuses to everyone.
Compare that to $2.6 Trillion in income tax, $1.6 T in payroll tax, $570 billion in corporate tax, and $430 billion in Other (which includes the tariffs).
Government spending will be $7 T vs revenue of $5.2 T. So the deficit will be $1.8 T (or more) and the debt will keep growing.
Wake me up, when we elect a president who’s serious about reducing the deficit. Until then, you’re just being hypocritical / complaining about the same stuff the previous presidents 3-4 presidents have done.
They’re all the same with regards to the deficit, because the Fed allows them to be. If Jerome Powell had real balls, he’d stop doing QE.
But when that president comes along, take it to the bank that he’ll either never be elected or will be a one-term president.
Americans don’t like austerity. Nobody does. Greece had to because the EU had them over a barrel. Argentina had to because their currency isn’t the global reserve currency.
But you already know all this. You just like to bash Trump, in part, because you want to act like everything that comes out of his mouth is to be taken literally. Did we take everything that came out of Joe Biden’s mouth literally?
BTW, Trump did reduce the deficit from FY 2024, But again, you know this.
Dems totally caved Government going to open back up and they got nothing Zero nada zilch
They won elections big time, and made Republicans appear to be the ones who are going to raise health insurance rates over the next two months. I think they feel alright about their gambit
I agree the Dem strategy worked for that purpose. I also believe they saw diminishing returns, especially if the Senate GOP opted to revise the filibuster rules which would have minimized the leverage of the Democratic minority the next 12 months.
8 Dems who aren’t running for reelection, and I’m sure are getting handsome payouts for their votes from the donor class.
The Virginia guy was really working for his constituents. Stuck between a rock and a hard place. I don’t know why Nevada caved.
Woohoo! MAGA!
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Bears Repeating:
In other words EVEN IF
A) Supreme Court Denies – The Tariffs
EVEN IF
B) Congress does not approve – The Stimulus
Even if the STIMULUS never happens – and there is a good chance it won’t
2. Supreme Court may invalidate tariffs
3.Congress may deny stimulus – Congressional Approval is required
Btcoin price already went up and anyone preparing for 1, 2 and 3 can hedge at a higher price
Quite Coincidentally perhaps the Trump Family are said to be tremendous investors in Bitcoin.
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I think Trumps economic policies are insane….and I voted for the guy! Of course there is no evidence that Kamala’s policies would be any better.
I didn’t hear any Kamala policies, other than continuing unvetted and uncontrolled immigration, at a time of increasing unemployment. The confirmed revelation that new jobs under Biden were almost 100% to illegal immigrants (and they counted them as legitimate jobs in the statistics), was very telling.
Mish didn’t mention it, Zerohedge did.
The decision of the British Columbia high court to give the land back to some tribe (the tribe wasn’t even asking for it!!!), and the official notices to homeowners that followed, was also very telling. It was by far the most important economic development in the Western World, and it was initiated by recommendation of the King of England (“No Kings etc.”) throughout the Commonwealth. Mish didn’t mention it, Zerohedge did.
In the US it’s been happening differently through continuous increased of home insurance, taxes, and large corporations purchasing them like crazy. Let alone some other tribe trying to build “caliphates” in Texas (Epic City) and Michigan (Dearborn).
It was obvious Trump’s policies would be idiocy. You’d have to vote for Kamala to find out what hers would have been.
I have not qualified for a government handout since the $600 I received when Bush 43 was president. Every tax filer got that one. I assume I will get nothing from the Trump handout.
He’s just making the bald attempt at buying votes. I guess he won’t be able to buy yours.
Please check my math rough estimates – at first glance Trumps proposal appears both a) Desperate and
b) it appears high hopes, quite a bit crazy and delusional
—————->>> the latest specific figures provided on tariffs is a net revenue estimate of $90 billion – $ 150 Billion
If US Population estimated as 345 million – Excluding high-income individuals is vague, but if we assume the top 10% (about 34.5 million people, with incomes above ~$200,000 per household, per IRS data) are excluded, the eligible population would be around 310.5 million.
Rebate Amount: At $2,000 per person, the total cost would be 310,500,000×2,000 =$621,000,000,000>>>>> $621 billion <<<<<
I do not even know what Trump is saying – I am pretty sure he does not either
Which makes this entire issue suspicious –
So Why ???
Why not pay down the deficit ?
1. wants to keep the stock market up – this is really the only accomplishment he can claim
2. wants to get bitcoin up – his family is heavily invested
3. Undermine Supreme Court – blame it all on them – I wanted to give you the tariff money – the terrible judges won’t let me
4. Needs Congressional Approval of Tariffs – blame it on the Democrats
the terrible Democrats won’t let me
========= END OF THE DAY
Everything Trump does appears Not Fiscally Wise for US Citizens
But at the same time appears to benefit Trump and his family
eg: Trump sons invested high in Bitcoin – this may bump up the price and give his sons ability to Hedge at a higher price – for a possible downfall if – US Supreme Court Denies
This appears to have a NET EFFECT of a Trump Family Bailout
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In other words EVEN IF A) Supreme Court Denies – The Tariffs
EVEN IF B) Congress does not approve – The Stimulus
Even if the STIMULUS never happens – and there is a good chance it won’t
Bitcoin price went up and anyone preparing for 1, 2 and 3 can hedge at a higher price
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Returning the money stolen from the people is just and right.
More verbal vomit from a demented and narcist president. No doubt, taco’s increasing drop in his “popularity” ratings is getting under his skin as he believes he is the king of the world.
And the midterms are coming up.
More reasons to buy precious metals and PM stocks. Trump is killing our nations credibility, and the dollar. Inflation is continuing to eat 3% of our buying power and weaponizing the dollar has cost us our credit rating.
When our credit was downgraded in May of 2025 “governance deterioration” was in the citation (thanks Trump).
Why has gold rallied so hard since the orange TACO took office? It is now impossible to believe that the US will not default on its debt.
Thanking liar Trump for bankrupting the USA in advance.
Bribery by President?
Trump and his sycophants are math challenged, ethics challenged and morally corrupt.
Trump is like having a spoiled toddler in the White House running around with a loaded M-16.
34x Felon and insurrectionist… The Epstein following sea is about to roll in
Detroit Lions just spanked his Washington politically corrects. Even Trumps football team sucks!
His team was the New Jersey Generals of the USFL.
And like most things Trump they failed completely. The serious issue is Trump failures may very well bring down the US.
It’s way past time to 86/47, Impeach, 25th or God.
Trump et all are nuts alright, but the idea that you can rebate money back to consumers nascently recognizes that by utilizing the double entry bookkeeping operations of equal debits and credits that sum to zero you can literally work miracles…especially if you realize that by integrating Strategic Monetary Gifting into the present monopoly monetary paradigm for the creation and distribution of new money which is Debt Only with my 50% Discount/Rebate policy at retail sale…you don’t have to increase debt or tax in order to redistribute which are probably the two biggest bitches that libertarians and conservatives actually want.
I should pitch my paradigm changing policy program to Trump. He’d probably find some way to screw it up as he’s a chicken and “not quite right” as the saying goes. But I’m used to that. After all I’ve been dealing with it here and elsewhere for almost a decade.
Unlike Biden, who was buying votes , he’s buying popularity. It’s pretty clear that he and Biden share the same understanding of government finances. Never realized he was a General in the FSA. We’re doomed.
Epstein? Epstein who?
Bibi? Bibi who?
I would hope the 2000 is going to go to tax payers who paid tax. In other words those who paid nothing (never filed or were net zero after deductions etc) should get nothing.
Trump clearly wants to do this because he already mentioned it months ago and because it will essentially be a vote buying scheme even though it’s a year early.
$2000 is peanuts, basically a big screen TV for most people and then the money is gone. Alternatively you could buy 3 or 4 steaks and the money is gone or maybe pay a couple of weeks worth of insurance (health, auto, home) and the money is gone.
But repubs need to do something, already losing Latinos they won. Easy come, easy go.
https://thehill.com/homenews/campaign/5595939-hispanic-voters-leaving-republican/
Republicans are reeling over an apparent erosion of support from Latino voters, a voting bloc that boosted the party in 2024, in Tuesday’s off-year elections.
According to CNN exit polling, New Jersey Gov.-elect Mikie Sherrill (D) won the support of 68 percent of Latino voters, while Virginia Gov.-elect Abigail Spanberger (D) received 67 percent support from Latino voters.
Pretty sure the average family is not buying 4 $500 steaks or 2000 flat screen TVs. They are buying 15 steaks and $200 flat screen TVs.
Median household (not person, household) income was only 83K last year. If that’s 2 people working then they’d get 4K back which is roughly 5% income boost which is solid money.
I am too old and poor to pay taxes. No extra money for me, and I could really use it for medical tests I can not afford.
just more deflection from the coming epstein storm that bannon and wolff and others are unleashing in 2026. border taxes are idiotic. see smoot hawley
I’m going to answer that questions by going out on a limb and calling the midterm elections. Now I don’t actually know who will win the midterms, I just know who will lose bigly and that’s the American people. Who’s the fool? The American people for voting for this clown.
There’s an old saying in Tennessee – I know it’s in Texas, probably in Tennessee – that says, fool me once, shame on – shame on you. Fool me – you can’t get fooled again. George Bush Jr. (another intellectual republican titan) /s
Sorry George, but you can fool ’em over and over again.