U.S. administration's ``spreading'' is blatant, fueling fiscal instability and rising prices - midterm elections

[Washington Current Affairs] With the US midterm elections on the 3rd of next month, the Trump administration is blatantly promoting a policy of "spreading the word". President Trump has vowed to hand out $5,000 (approximately 790,000 yen) to every adult citizen if the ruling Republican Party gains control of both houses of Congress. There is a plan to use bold measures to counter high prices to gain an advantage in the election campaign. However, it could exacerbate financial instability and accelerate inflation, putting pressure on citizens' lives.

Since September, the administration has also announced that 20 million people enrolled in public health insurance for the elderly will receive a payment of $90 (approximately 14,000 yen) per person. Amid growing opposition to the construction of an artificial intelligence (AI) data center, which is a priority for the administration, due to concerns about the deterioration of the living environment, a proposal to hand out cash to nearby residents has also been floated.

Behind this ``spreading out'' without regard to pretense is the poor reputation of economic policy. According to a CNN poll, only 27% of Americans said they approve of Trump's economic management.

In response to growing dissatisfaction with high gasoline prices caused by the U.S.-Iran conflict, Trump, who is aiming to make a comeback with economic policy, repeatedly mentioned the $5,000 handout during his campaign appearances. He insists that ``generating $5,000 (financial resources) is easy,'' but this is unpersuasive as the federal government's debt, which has surpassed the $40 trillion (approximately 6,300 trillion yen) mark, continues to grow. The opposition Democratic Party of Japan has criticized the move, saying it is an act of ``buying votes with money.''

According to the Responsible Federal Budget Board (CRFB), a nonpartisan policy think tank, the cost is expected to be $1.2 trillion (approximately 190 trillion yen), about 1.5 times the amount of cash transfers implemented during the coronavirus pandemic to stimulate the economy. This could lead to higher inflation and higher interest rates, leading to ``increasing living costs for general households'' (CRFB).

There is a growing expectation that the Democratic Party will take control of the House of Representatives, and that they will also gain a majority in the Senate, which was initially thought to be dominated by Republicans. Even if Mr. Trump were to forcefully push for the $5,000 handout, it will likely be extremely difficult to reach an agreement with Congress, with some economists pointing out that ``Republicans are calling for significant spending cuts as a package.''