The cash bazooka: Why Trump wants to send you money

The big picture: There are two main reasons lawmakers send cash, and each come with complications.

1. Extra dough raises economic activity, and helps those who need money get by.

• Outside of recessions, however, all that increased economic activity can lead to inflation. That's one of the big knocks against the Biden administration's $1,400 checks in 2021.

2. People like getting money. "It's just base populism obviously, to send out checks to folks without any particular need outside of a recession," says Stan Vueger, an economist at the conservative American Enterprise Institute.

• Yet it's not clear that generosity is ultimately rewarded. Biden's checks did not assuage voters' anger over rising inflation.

Follow the money: Giving people cash can provide an important economic boost, especially in downturns, says Jared Bernstein, who chaired the Council of Economic Advisers under Biden.

• "But, perhaps weirdly, I've never seen politicians get any love for such distributions."

Between the lines: "The politics next year are all about the midterms, if you can boost the economy before that and the inflation comes due after the election, it could be a politically smart strategy," says Claudia Sahm, a former Federal Reserve economist who was a big proponent of sending cash during the 2020 pandemic recession.

• Sending out money is also something the federal government is actually good at, she says, as opposed to figuring out complicated affordability policies around, say, housing or price competition.
• "Treasury is very good at firing up the electronic printing presses and getting the money out quickly. We do it in crisis. We have a lot of experience at it."

Zoom in: For the current White House, it's a go-to policy lever, instead of getting into the administrative weeds.

• For example, to address health care costs, Trump has frequently talked about simply giving people money to buy health insurance.

Yes, but: "These are all very different policies being thought about in different contexts," Kush Desai, a White House spokesman, tells Axios.

• With the $1,776 checks Trump is showing support for the military, as he's been doing. Farmer payments are being used to ameliorate tariff impact. The health insurance idea is part of a Republican push on health savings accounts.

What they're saying: "President Trump is delivering on a longtime GOP priority to reduce waste, fraud, and abuse in our government and let the American people keep more of their hard-earned money via tax cuts," Desai says.

Friction point: The president can't do the big $2,000 checks without Congress, and so far Republicans seem cool to the idea.

But while we're not in recession, there are pockets of pain – particularly for the lowest-earning households, hit disproportionately harder by tariffs.

• A policy more tailored than simply giving checks to everyone might be a better fix in our current moment, Sahm says.
• She points to Canada, which has mitigated tariff pain by sending out quarterly payments to low-and moderate income households. Instead of a big whoosh of cash, the steady drip of money lessens the risk of inflation, she says

The problem there, politically, is that such a system is far less splashy than a four-figure check. Sahm compares it to when President Obama adjusted payroll withholdings in his first term, and people hardly realized they were getting a little extra in their checks.

• "It was stealth stimulus," she says. "President Trump is not a stealth president."