Rs 2580000000000: US's treasury overflowing with billions in tax revenue! Here's how Trump administration plans to use money..., Americans to get...

India.com

a day ago

Escalating his tariff offensive against India, US President Donald Trump on Wednesday slapped an additional 25 per cent duty–doubling it to 50 per cent–on Indian goods over New Delhi's continued imports of Russian oil. The move that is likely to hit sectors such as textiles, marine and leather exports hard was slammed by India as 'unfair, unjustified, and unreasonable'. How much has the US government collected so far this year?
The Treasury Department reported that in the last month, the US government collected almost $30 billion in tariff revenue in July, a 242% increase from July of last year, reported CNN. The government has earned $100 billion in revenue from tariffs since April, when the president instituted a 10% tariff on nearly all goods and many other even higher tariffs. This is three times more than was collected in the previous year in the same four months. So the question arises: what will the Trump administration do with all this money?
As reported by CNN, Trump has offered two possible options for the tariff revenue: Either to reduce the government's multi-trillion-dollar debt or to send 'tariff rebate checks' back to the American people.
'The purpose of what I'm doing is primarily to pay down debt, which will happen in very large quantity,' Trump was quoted as saying by CNN. 'But I think there's also a possibility that we're taking in so much money that we may very well make a dividend to the people of America,' he added. How will tariff revenues affect the federal budget deficit?
According to CNN reports, neither of those plans has come to fruition – at least not at this time. So, many Americans may feel that the billions of dollars coming in from tariffs, mostly paid upfront by U.S.-based businesses importing foreign goods, are sitting idle. There is a lot more going on behind the scenes.
The government collects revenue from various sources, such as taxes and tariffs. The revenue is all sent into the general fund, which is managed by the Treasury Department. The Treasury calls this general fund 'America's checkbook.' The Treasury Department then spends that money on the government's obligations, including payments such as Social Security.
When the money raised by the government does not equal the expenses it has, resulting in a budget deficit, it needs to borrow money to cover the expenses it cannot pay with tax revenue. The national debt is now exceeding $36 trillion, and the debt is increasing. Many economists are concerned about the increasing debt and think it could be impacting economic growth.
This is because the government, like an individual, is also required to pay interest on the money borrowed. The more it borrows, the larger its interest obligations grow—adding another monetary impediment that forces money away from critical public investments, like upgrading roadways and infrastructure.
While the tariff revenue isn't enough to plug the $1.4 trillion budget deficit the government is facing this fiscal year, it has helped close the gap somewhat. Therefore, the government is borrowing a bit less than it would in the absence of these tariff collections.
If Congress agrees to Trump's proposal to use tariffs to send 'rebate checks' to Americans—an idea supported by a bill introduced last week by Republican senator Josh Hawley—it would probably create a budget hole, Ernie Tedeschi, director of economics for the Budget Lab at Yale, and a former economist in the Biden White House said, reported CNN.