Imposing aggressive tariff policies has become a way for Trump to dominate countries with his power and authority. Moreover, while this method is affecting the global economies, including the US economy, a lot of revenue has been generated from tariffs. You can say that this much revenue can be distributed to the entire population of Washington if the government wanted. The original concept of tariffs was to aid American manufacturing units in their development and to assist in paying the high debts. However, Trump seems to use this method to dominate over countries and use this power to pay off stimulus checks. In a statement on Tuesday, he described how the tariffs collected can be distributed as a dividend throughout the country.
More about the tariff rebate checks in the US
There hasn’t been a deep discussion about the tariff rebate checks, which are funded by the heavy tariffs on countries. Moreover, this idea is just floating above the water for the time being, but has not been confirmed. But what if it actually comes true and some rebate checks are heading our way? On receiving these checks, many households will be assisted, as high inflation is emptying their fund reserves. Additionally, it will also reduce the increasing exasperation among the public due to Trump’s aggressive policies and the elevated cost of living.
This news got through the wireless connections of the internet after Senator Josh Hawley brought it to the Government. A bill proposal named the ‘American Worker Rebate Act’ was kept on the table, which suggested using the tariff revenue to send economic relief payments to the public. Approximately $600 will be credited directly to the account of adults of the family who have a dependent child. Therefore, if we calculate the rebate income of a family of four, around $2,400 can be received by them.
While this plan sounds perfect, there are some issues that cross its path in its implementation. Using tariff revenue to soothe the financial burden on the public will not work as expected, according to several analysts. Moreover, it will intensify the price hikes, which are already becoming an issue for the people of America.
What you should know about Tariff Revenue Spikes?
Tariffs and their related revenue are not an easy topic to forecast or determine based on some preliminary data. But if we want to have a rough idea, we have to begin from the starting point of the tariffs.
Americans have always been the quickest to spend their money on the things they need or they desire. The savings concept was never fully realized in their households until they started needing fund reserves. Therefore, the demand for items is usually increasing in their economy, but at a subsequent cost. However, the supply of these items is mostly limited because of the inability to expand the manufacturing units. This issue has been elevated because of the older generations, immigration, and even trade wars, that has weakened their economy. There is always an associated risk of resource shortage, as nature doesn’t produce enough to meet every desire.
Even in such a state, the White House is taking pride in the generation of high tariff revenues, without delving deep into the matter. Additionally, they are even thinking about rebate checks, which could possibly ruin their economy. According to the Treasury Department, the month of July saw a 242% increase in the tariff revenue, as compared to the revenues of the previous year. This is not something to be proud of, as the more tariff revenue, the more inflation in the economy.
Is the provision of Stimulus Checks really crucial at this point?
Usually, the government tries to save as much money as possible for national emergencies, such as the COVID-19 pandemic. However, the US Government is thinking of passing a provision without thinking about the consequences on the economy. There is no reason a stimulus check has to be released in the nation, as the economy is considerably stable. Moreover, Trump has always bashed Joe Biden for releasing stimulus checks during that time, saying it caused inflation. It is quite contradictory, as his government is trying to pass a rebate check bill in the first place.
The consequences have started to show up, as economists fear that the economy might go into recession with these trends. There have been several disputes on this topic because rebate checks will give consumers a chance to demand more. This is the basic principle of economics that prices go up with demand because of a direct proportional relationship. However, the government is denying the claims, saying that this will be a one-time inflation in their economy. The government is willing to take a serious risk, while the negative results have started to show up. The workforce of the US is declining continuously, the prices are above the roof, and the economy is crashing.
Sen. Josh Hawley’s Bill Proposal – ‘American Worker Rebate Act’
As mentioned above, the Government is happily celebrating the huge tariff revenue, while inflation is at its peak. Additionally, it seems determined to enforce a rebate program, which might prove to be a bad idea. The primary issue with this rebate program is that the government is not paying attention to how the economy will be affected. Politically, the rebate program is a good idea to attract more voters and reduce the financial burden of American families. However, it comes with a cost of a compromised economy, which can also lead to a recession. The initial proposal for the rebate checks is to distribute up to $600 to the workforce. If the tariffs exceed the expected balances of the Government, their amount can be increased.
Conclusion
The only considerable thing in the legislation was to promote the welfare of lower and middle-class income groups. It will not include the higher income groups who have enough to feed their families and focus on bringing down poverty. Otherwise, increasing tariffs and using their revenue for rebate checks is a bad idea for citizens, as well as the economy.