Opinion: Trump's "Big Money Splash" Will Forge an Inflation Boomerang, Stimulus Payments Often Come With a Hefty Involuntary Tax

On November 9th, KobeissiLetter presented a detailed market analysis concerning the "Trump $2000 Per Capita Tariff Bonus." It was stated that President Trump has just announced the "Tariff Bonus," with each American being eligible to receive at least $2000. It is anticipated that more than 85% of American adults will receive this payment, and the total distribution will exceed $400 billion. Meanwhile, the U.S. debt is approaching $40 trillion, and the economic impact of this large-scale "stimulus" payment is substantial. Firstly, who will be entitled to this payment? The most recent stimulus payment was the $1400 stimulus check in March 2021. The full amount is only provided to individuals with an annual income not exceeding $75,000, households with an annual income not exceeding $112,500, and married individuals with an annual income not exceeding $150,000. The same criteria will be in effect in 2025: currently, approximately 220 million American adults meet these income criteria. Just like how the 2021 stimulus check significantly boosted consumption, however, after a one-time "stimulus," there is usually a prolonged period of high inflation. Following the last round of stimulus measures, the U.S. inflation rate neared 10%. Monetary stimuli only add fuel to the fire, and the U.S. has never implemented such a large-scale stimulus plan while the stock market is near historical highs. Eventually, stimulus payments almost always transform into large amounts of "involuntary taxation," and Americans will ultimately pay several times the amount of the stimulus subsidy received in the form of inflation.