On Sunday, former President Trump announced a plan to distribute at least $2,000 to every American, excluding high-income individuals, using funds generated from tariff revenue. This proposal, likely requiring Congressional approval, mirrors a similar bill introduced by Senator Josh Hawley earlier this year for $600 rebates. However, the Treasury Department has previously indicated a priority of using tariff revenue to reduce the national debt, which currently stands at $38.12 trillion. Despite the conflicting goals, tariff duties collected through the first three quarters of the year reached $195 billion, although consumers currently face an effective tariff rate of 18%, the highest since 1934.
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Prime Minister Mark Carney announced a series of measures designed to bolster Canada’s economy against trade disruptions, particularly those stemming from the U.S. These measures include a pause on the electric vehicle (EV) mandate, a $5 billion strategic response fund to aid businesses, and a “Buy Canadian” policy to prioritize domestic procurement. Additional initiatives involve a reskilling package for up to 50,000 workers, expanded employment insurance benefits, and increased loan availability for small and medium-sized enterprises. The government will also provide assistance to the agricultural and seafood sectors, which have been negatively impacted by tariffs.
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As part of a significant effort to stimulate domestic spending amidst global economic instability, the South Korean government will begin distributing cash handouts to all citizens from July 21. This initiative, backed by a 31.8 trillion-won supplementary budget, will provide a one-time payment of 150,000 won (approximately USD 110) to all South Korean residents as of June 18, aiming to boost local economies through an eight-week distribution period ending September 12. In addition to the universal payment, targeted assistance will be given to vulnerable groups and those living outside of the Seoul metropolitan area. A second round of payments for the bottom 90 percent of income earners is scheduled from September 22 to October 31.
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A National Bureau of Economic Research (NBER) paper reveals that the initial $510 billion in Paycheck Protection Program (PPP) loans disproportionately benefited the wealthiest 20% of the population, with approximately $370 billion going to this group. While the program successfully preserved millions of job-years, its broad approach lacked targeted distribution, resulting in a highly regressive outcome. Although intended to support paychecks, a significant portion funded business owners and stakeholders. Improvements in targeting in 2021 demonstrated the feasibility of more equitable distribution, highlighting the need for enhanced government infrastructure to effectively direct future aid.
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John Q. Hosedrinker