Presidential candidate Donald J. Trump has promised to pay 1 million dollars to every American if he gets elected – on the condition that they spend the money in the U.S., on American goods and services. While economists denounce the move as 'unworkable populism', some observers see the bold announcement as a clever pivot by the divisive candidate towards the center of the political spectrum.
“I will be the greatest wealth president in the history of the United States,” Trump told ecstatic crowds in Des Moines, Iowa, as he announced his intention to offer a “one-time, one-million-dollar bonus to every man, woman and child” in the United States as one of his first measures after taking over the presidency from Barack Obama.“ Instead of spending a ton of money on stuff from China, if every American would spend a million dollars on American-made goods, we would solve the trade deficit, create millions of jobs and make this country great again,” Trump said, to great cheers from the audience.
Giving every American $1 million would cost $320 trillion. That’s more than 800 times America's trade deficit with China last year, which was $365.7 billion.
Trump insists the money can be generated by imposing trade tariffs on Mexico and China:
“I don’t blame them for taking advantage of our weakness. But enough is enough. And if there’s not enough money to pay out everyone, I will personally hand out cash from my own huge fortune,” Trump said.
The plan is classic Trump: as over the top and outrageous as his proposal to build a wall along the U.S. border with Mexico to keep out illegal immigrants, “and have Mexico pay for it.” But from the Trump campaign perspective, it makes an elegant kind of sense, bringing together various strands of Trump's rhetoric so far.
“Some thought Trump's wealth would play against him with those segments of the electorate hit by economic hardship, but by bragging about his billions, Trump has turned that assumption on its head,” says Avril Poisson, political science professor at West Dakota University. “As improbable as it is, both he and his audience see him as a self-made man, who only needed a small loan from his father to kick-start his fortune. A loan of exactly $1 million dollars, incidentally. He is now extending that proposition to the entire American people.”
By linking the million-dollar handout to the trade imbalance with China, Trump is reinforcing his message that the Chinese are not playing fair, says Alberto Mentira, Jr., a political economist at the Silver City Academy of Bilateral Trade.
“He's been repeating over and over that weak American leadership has lead to China having an unfair advantage. That implies that America's fundamentals are sound, and that all that is needed is for someone to level the playing field. Like Trump offering a million dollars to every American to spend on American goods and services. The implication is that this would re-energise U.S. manufacturing, ushering a golden age for the American economy.”
In the same vein, the candidate also insisted that the border wall with Mexico, which he said should be paid for by Mexico itself, be built with American manpower and U.S.-sourced materials.
The million-dollar offer is more than a clever piece of economic nativism. As Trump himself noted, it would also be an instrument of his policy to remove illegal aliens: “Anybody found claiming the bonus who does not have U.S. citizenship will be deported immediately, to Mexico, or wherever.”
But most importantly, dangling a million-dollar carrot in front of every American is a way for Trump to reposition himself on the political spectrum. Despite earlier claims that he is “a uniter, not a divider,” the angry factionalism unleashed by Trump's rhetoric had recently descended into actual violence at his rallies, directed at people protesting his policies, or perceived as such.
“Trump understands that he has high negative ratings, and that he has to change the perception that he is all angry talk. However far-fetched this proposal is, at least it's more concrete than his empty rhetoric so far,” says Poisson.
To expedite the distribution of the million-dollar ‘bonuses’, Trump floated the suggestion of printing special $1,000-dollar bills, “with my face on it, so people will know who gave them this money.” Those large-denomination bills would indeed make it easier to distribute the large sums to the public.
But economists say the plan is unworkable at best, and potentially extremely harmful.
“Let's assume he would actually want to go through with this: where do you get $320 trillion? That’s an insane amount of money. It’s 80 times as much as the federal budget proposed for 2016, which is $4 trillion. Put another way: last year, we spent $600 billion on the military. We’d have to do that for more than 500 years to reach the amount of Trump’s handout,” says Wayne Panini, analyst at the Institute for Applied Economics.“
But even if president Trump pulls this off, the effect will be nothing like he thinks it will be. Money is valuable because it is scarce. If everybody gets an equal amount more of it, its value will decrease in a rather predictable manner. For example, if everyone who wants to buy an expensive car now has the money for it, the price of that car will go up until supply and demand are again in balance. If he floods the market with money, president Trump won't create wealth or jobs, but debt and inflation. However, Donald Trump's proposition got some unexpected support from the Bernie Sanders campaign.
A spokesperson for the left-wing Democrat said that Trump's idea “showed real concern for the plight of the American worker.”
Mr. Sanders would be talking to Mr. Trump about the details of the scheme. Could this be the beginning of Donald Trump's biggest stunt yet – a Trump-Sanders ticket?
Trump wants to make every American citizen a millionaire pic.twitter.com/vOOkBo79bX https://t.co/UyVLD8VLDe via @howmuch_net #USA
— How Much (@howmuch_net) March 30, 2016
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