Economist Peter Schiff criticized President Donald Trump‘s promise of a $5,000 payout to adult voters, warning it could cause a significant inflation spike.
Schiff took to X to express his concerns over Trump’s pledge to lure voters ahead of the November midterms. He referred to the proposed payout as a “bribe,” that requires domestic spending and would force the Federal Reserve to print money.
He warned that it would result in “massive inflation,” even exceeding anything seen under former President Joe Biden.
In another post, he added, “The craziest part is that Treasury Secretary Scott Bessent actually clapped following this ridiculous promise.”
Besides Schiff, Rep. Jamie Raskin criticized Trump’s proposed $5,000 “Trump Dividend,” calling it a political bribe that could add $1.3 trillion to the national debt.
He further accused his administration of fueling debt, wars, tariffs, corruption and loss of health insurance coverage.
Trump Ties $5,000 Payout to Midterms
Trump’s pledge, made at the Republican midterm convention on Wednesday, promises a $5,000 “dividend” to every adult U.S. citizen if Republicans retain both the House and Senate in November.
The payout, tied directly to the GOP’s midterm performance, could cost an estimated $1.35 trillion, according to a Reuters report.
The President said the proposed payment would be possible because of strong U.S. economic performance, comparing it to a corporate dividend. He also said recipients would be required to spend the money domestically, though no enforcement mechanism has been detailed.
Inflation Risks Remain Elevated
Schiff’s warning comes at a time when inflation fears are already high. July PCE inflation rose 0.2% monthly, while annual inflation held at 3.7%. Core PCE remained elevated at 3.3%, well above the Fed’s 2% target.
TD Securities expects headline CPI to rise 0.37% month over month, driven by a 4.2% jump in gasoline prices, while core services inflation is forecast to increase 0.26% month-over-month.
However, the bank expects overall August inflation to remain relatively contained. Household goods and apparel are expected to drive the decline, indicating limited tariff pass-through on consumer prices. However, it sees upside risks because its forecast depends on large declines in tariff-sensitive categories.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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