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A Check in the Hand Those Refund Checks Oct 2 2026
Money for Votes
A bad idea
I received more than a few calls and emails regarding my opinion on the recently proposed “tariff refund” checks from Washington. These checks are not a done deal but the amount of $5,000.00 is healthy enough to garner plenty of attention as well as debate.
The proposed amount pales in comparison to the free money given out during the CoVid bailouts. Those monies totaled into the many trillions.
But $5,000.00 is almost ten times the amount of the $600.00 checks mailed out during the 2008/2009 financial crisis.
Although the exact details of the disbursement have not been announced, estimates for the total cost of the checks would be well over a trillion dollars.
I can’t help but wince. No one in government on either side of the political aisle seemingly knows anything about economics. Nor politics for that matter.
Much like the implementation of tariffs, mailing out $5,000.00 checks to every citizen in the U.S. would be extremely inflationary.
As if we haven’t had enough free money given out already. Have we learned nothing from the inflation we are now witnessing? And another round of free money would add even more fuel to the inflationary fires.
And what about the political bribery of promising funds if the election goes one way or the other. Does anyone else see a problem with this?
Once we go down that road, there will be no end to the tit for tat money giveaways from future candidates.
Not that it hasn’t already occurred, mind you. Money for votes is nothing new. There just seems to be something especially egregious about this latest political offering.
The amounts of money given out during the CoVid fiasco was beyond unprecedented. And so is the inflation from it.
Add to that the oil price spikes, the ongoing tariffs, the deficit spending spree that occurs every year since Lyndon Johnson was president, and the many other government programs tossing tax dollars everywhere. Then there is the fraud no one hardly talks about.
This whole check thing scares the heck out of me. I cannot imagine what would follow after millions of people get a whopping five grand in their mailbox.
The stock market would obviously benefit and probably run like hell for months. Then, as companies reap profits from their inventory flying off the shelves, the earnings reports from this buying spree would further boost stocks well into the future.
Theme parks, cruise lines, airlines, hotels, restaurants and other sector stocks would likely jump as people splurge on the experience dividend. Companies that cater to these sectors would also rise. No doubt some people would buy those overpriced sneakers, running outfits and the like and car companies would certainly sell some shiny new toys.
The imagination wanders as to who would do what with their newfound wealth.
To some, it would be a nice bump in lifestyle. To others, it would be a life saver.
For the most part, convincing a nation (where more than half its people can’t afford a $500.00 emergency bill), that handing out $5,000.00 checks is a bad idea, is a nonstarter. Few people would object.
Much like hiring Erin Brokovich to go speak and convince the people of Paradise, California to sign with a particular class action law firm (yes that really did happen), the move by Washington had brilliance in it.
Whereas the party not currently in the White House arguably errs on the side of free giveaways, the $5,000.00 check proposal takes the ‘money for votes” page right out of their playbook.
It will be interesting to see and unpredictable in its effect of what a $5,000.00 windfall to every wallet in America, all at the same time, would look like.
It would be like injecting a racehorse with ten times the amount of steroids, or something like that.
There is no telling what all that money hitting all at once will do to demand, supply and the eventual hangover.
These are vast amounts of capital we are playing with, and like the CoVid money tsunami that caused the massive inflation we have today, this check idea is very bad medicine for an economy already reeling from similar medicine handed out just a few short years ago.
And now they want to do it again?
Insanity is defined as doing the same thing over and over again yet expecting a different result.
It won’t be. Inflation will shift into overdrive.
This $5,000.00 check idea may be a brilliant political move, but in my opinion, a very, very bad idea.
“Watching the markets so you don’t have to”
This article expresses the opinion of Marc Cuniberti and is not meant as investment advice, or a recommendation to buy or sell any securities, nor represents the opinion of any bank, investment firm or RIA, nor this media outlet, its staff, members or underwriters. Mr. Cuniberti holds a B.A. in Economics with honors, 1979, and California Insurance License #0L34249 His insurance agency is BAP INC. insurance.
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