Trump's $5,000 payment would reignite inflation, economists say
Summary
President Donald Trump proposed giving $5,000 to every adult in the U.S. if Republicans keep control of Congress. Economists say this idea would increase the federal deficit, cause more inflation, and worry investors about the government's large debt.Key Facts
- The payment would cost about $1.25 trillion, much more than the $125 billion in tariff revenue claimed to cover it.
- To pay for the plan, the U.S. would likely have to borrow more money, increasing the federal deficit from $1.8 trillion to around $3 trillion.
- Similar cash payments in the past led to higher inflation, with prices rising to a 40-year high in June 2022.
- The national debt recently surpassed $40 trillion, causing investors to demand higher interest rates on government bonds.
- Higher government debt raises borrowing costs for consumers, affecting loans like mortgages and car loans.
- Fiscal experts say this plan is risky and unrealistic given current economic conditions.
- The White House defended President Trump’s record on economic and trade issues.
- Many believe Congress is unlikely to approve such a large cash payment plan.
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