“We are taking in Trillions of Dollars and will soon begin paying down our ENORMOUS DEBT, $37 Trillion,” US president Donald Trump “truthed” on his personal social media network on November 9.  And, he promised, “a dividend of at least $2000 a person (not including high income people!) will be paid to everyone.”

I’m surely far from the first to let you know that the math doesn’t check out.

The US government took in $195 billion, not “trillions,” in tariff revenues for the fiscal year ending on September 30. Even given Trump’s constant temperament-driven tweaks to the rates, it would be surprising if next year’s tariff take comes to $500 billion.

A $2,000 check to 90% of Americans (with 10% as the excluded “high income people”) would run about $540 billion. For the government to send out more than it’s raking in AND “begin paying down our ENORMOUS DEBT” is mathematically impossible.

In order for Trump to deliver on those checks, he’ll have to either dramatically cut the US government’s operating budget — which he’s not going to do — or run even higher operating deficits,  increasing the “national debt” further and faster.

But more than the fiscal infeasibility of the proposal, I’m interested in Trump’s claim that those checks would constitute a “dividend.”

A dividend on what, precisely?

Dividends are payments to shareholders in a business enterprise, distributed as a share of profits.

As a “business enterprise,” the last time the US government turned a “profit” by spending less than it received in tax payments was 2001.

More importantly, none of us are shareholders in the US government. We don’t own it, or own any part of it. We can neither buy additional “shares,” nor sell any “shares” … because we hold none.

On the absolutely, positively most generous view of the relationship between US citizens and the US government, we’re “customers” who pay taxes in return for various goods and services (defense, roads, etc.), and are occasionally polled as to our preferences on who gets to run parts of the enterprise.

A more realistic view of that relationship: The government is a rancher and we’re the sheep it shears regularly. Any supposed benefits we receive in return for our wool are dispensed to maximize the wool haul while keeping the sheep docile and penned.

If you get that $2,000 check, keep in mind that it comes out of $2,000 you’ve either paid to the government in taxes (yes, tariffs are taxes — taxes on YOU), or will be expected to pay back. with interest, to the government’s creditors.

At best, you’ll be getting a little of your own money back.  Hooray! But more likely, you’ll be treated as co-signer on a loan for the amount, obligated to pay it back, with interest, in the future.

Thomas L. Knapp (X: @thomaslknapp | Bluesky: @knappster.bsky.social | Mastodon: @knappster) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY

“President Donald Trump is scrambling to develop a plan and message on still-high prices,” Roll Call reported on November 10, “after the White House appeared caught off guard by how the affordability issue helped drive Republican losses” in elections around the country on November 4.

As of that reportage, Trump maintained one truth and one falsehood.

The truth: Yes, “affordability” is a trending buzzword that the Democrats made good use of in recent campaigns and that Republicans “have to talk about it” if they want to get back in the electoral fight.

The falsehood: “We have prices down.”

The US Bureau of Labor Statistics hasn’t issued a Consumer Price Index report for October due to the recent “government shutdown,” but as of September the CPI was up by 0.3% from August, and annual price inflation as measured by that statistic is running at a little under 3%.

And, as most people seem to be noticing, CPI isn’t a very good indicator for actual cost of living. It uses a fixed “basket of goods,” some of them more slow/resistant to price changes than others, and assumes that people continue to buy the same amount of stuff from that same “basket” instead of substituting other goods.

Prices are going up, not down, and they’re probably going up even faster than the US government claims.

What can politicians actually do, rather than just promise to do, to “deliver” on “affordability?” One thing and one thing only: Get out of the way.

Trump did just a little bit of that on November 14 when he rolled back his economically ruinous tariffs on, as Reuters reports, more than 200  “products U.S. consumers routinely purchase to feed their families at home, many of which have seen double-digit year-over-year price increases.”

Government taxes, government borrowing, government inflation of the money supply, government spending, and government regulation increases prices, full stop.

Yes, even when the government policy in question is sold under the claim that it will increase “affordability.”

When government taxes you, you have less money to spend on the things you need and want.

When the government spends money, it’s competing with you in an ongoing “auction” for goods and services. More demand versus the same supply means higher prices.

When the government borrows money and/or or inflates the currency supply, it puts the negative effects of both taxing and spending on steroids.

And compliance with government regulations adds costs that the makers of goods and providers of services pass on to you.

When taxes, spending, borrowing, inflation, and regulation increase, living your life becomes less affordable.

When taxes, spending, borrow, inflation, and regulation decrease, living your life becomes more affordable.

No Mamdani Magic Wand or Canute-like Trump decree can change those two facts.

As both parties gear up to run on “affordability” promises in the 2026 midterms, listen to the candidates. If they’re promising to reduce the size, scope, and power of government, they just may — MAY — be honest and serious. If they’re not promising those things, they’re neither honest nor serious.

Thomas L. Knapp (X: @thomaslknapp | Bluesky: @knappster.bsky.social | Mastodon: @knappster) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY

In a graphic posted to Truth Social on November 8, Donald Trump lists himself next to Franklin Delano Roosevelt as one of two “great presidents,” because FDR’s “New Deal” introduced the 30-year home mortgage and Trump, apparently, wants to “go large” on the idea. Federal Housing Finance Agency director Bill Pulte confirmed on X that “we are indeed working on The 50 year Mortgage  — a complete game changer.”

The Trump/Pulte proposal brings up two questions: First, is a 50-year mortgage a good idea? Second, why on earth does the federal government set mortgage terms?

The answer to the first question is easy: Longer mortgage terms are terrible for people borrowing money to buy homes.

As the length of a mortgage increases, the monthly payment comes down a little but the total amount paid goes up a lot. Let’s  take a simplified look at how things pan out for the same home, under current conditions, given different mortgage lengths.

The average US home price (as of May 2025) is $522,200. At the moment, the average interest rate on a 20-year mortgage is 6.12%; on a 30-year mortgage, 6.25%. I’m just guessing by linear extrapolation here that the interest rate on a 50-year mortgage would be about 6.5%.

On those terms, the monthly payment on a 20-year mortgage would come to $3,777.44 and the buyer would end up paying $906,586.57 total for that $522,200 home (this example doesn’t include the insurance, property taxes, etc. that get rolled into monthly mortgage payments as well).

At 30 years, the monthly payment would come down to $3,215.28, but the total paid would be $1,157,499.08 — more than twice the supposed price of the house!

And at 50 years? Your $2,943.73 monthly payment — only 23% less than the 20-year payment — would end up totaling $1,766, 237.75. Not only is that more than three times the supposed home price, but it’s nearly twice as much as you’d have paid on a 20-year term and about 35% more than you’d have paid on a 30-year term.

And by the way, mortgage payments are “front-loaded” toward paying interest at the beginning, so you don’t build significant equity in the home, by paying down principal, until the last few years of your mortgage term.

If you’re buying a home, the shorter the mortgage the better, even if you have to settle for a little less house to make the payment. Longer mortgages benefit the lender far more than the borrower.

As to why the federal government sets mortgage terms, well … about 70% of mortgages are “government-guaranteed” via Fannie Mae, Freddie Mac, the Federal Housing Administration, and other agencies.

That gives the federal government significant monopsony power. If you’re a lender, your home loans are “qualified mortgages” as defined by the market’s biggest “customer” and its bureaucratic rule-makers.

Not that adding 50-year-mortgages to the “qualified” and “guaranteed” basket would be an imposition. Banks love longer-term loans for the reasons explained above: They get more out of you versus what you get out of the deal.

Strange: It’s almost as if those government agencies work for the banks rather than for the borrowers.

Thomas L. Knapp (X: @thomaslknapp | Bluesky: @knappster.bsky.social | Mastodon: @knappster) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.

PUBLICATION/CITATION HISTORY