As President Donald Trump touts a newly announced $12 billion farm support package, insisting it will be funded by tariff revenue rather than taxpayers, economist Stephen Moore says the political logic may be appealing but the economics are far less so.
On Chicago’s Morning Answer, host Dan Proft opened the conversation with Trump’s remarks at a recent cabinet meeting, where the president framed the support as a small portion of “hundreds of billions” allegedly flowing into federal coffers via tariffs. Trump told reporters that tariffs have driven down deficits, strengthened American industry, and created enough fiscal room to send farmers a financial cushion as they move this year’s harvest to market.
Moore, co-author of The Trump Economic Miracle, praised the broader economy but pushed back sharply on the idea of expanding subsidies. While he agreed that growth is strong, wage gains are real, job openings plentiful, and stock valuations soaring, he was quick to caution that the recent enthusiasm for “tariff dividend checks” risks repeating the worst habits of Washington.
“This is corporate welfare,” Moore said bluntly. “We’ve got to get out of the business of handing people money.”
Despite polls showing that many Americans still view the economy negatively, Moore attributed that sentiment to psychological bias and the lingering memory of inflation. Most of the price spikes, he argued, occurred under President Biden, not Trump. But even with favorable indicators, Moore warned that growing government intervention—whether in agriculture, energy, or health care—could jeopardize long-term stability.
Proft pressed the point further. If farmers receive guaranteed margins and government checks, why shouldn’t other industries—or even consumers? Moore acknowledged the slippery slope.
“At one point Trump even floated the idea of giving everyone a $2,000 check,” he said. “We’re running a $2 trillion deficit. You can’t just hand out money because tariffs brought in revenue.”
Healthcare Subsidies: Another Imminent Flashpoint
The two also discussed the likelihood that Republicans will fold on extending enhanced Obamacare subsidies enacted under President Biden. Moore said the subsidies—now reaching households earning well into six figures—were a political trap laid years ago.
“The Democrats said they’ll shut down the government unless people making half a million dollars get federal health-care subsidies,” Moore noted. “It’s insane, but Republicans may cave.”
Proft pointed out that while Senate Republicans have unveiled meaningful reform proposals, such as Senator Bill Cassidy’s bill redirecting subsidy dollars to health savings accounts, party leadership appears to be going through the motions. Moore agreed, saying the political pressure to maintain subsidies—even for affluent households—is overwhelming.
“The entire system is broken,” he said. “Nobody knows what anything costs in health care. We don’t have real pricing. The more the government subsidizes, the more costs rise.”
Rejecting Stakeholder Capitalism
The conversation took a philosophical turn when Proft played a clip from former Labor Secretary Robert Reich, advocating “stakeholder capitalism”—the idea that corporations should prioritize employees, communities, and environmental concerns alongside profits.
Moore dismissed the concept as wishful thinking.
“When I invest in my 401(k), I want companies maximizing shareholder value,” he said. “If a company says they’re not trying to make money, I’m not investing.”
He argued that genuine social value comes from profitable businesses that produce goods and services people willingly buy.
“You serve and you thrive,” Moore said. “You don’t serve and you go away. That’s the magic of free enterprise.”
A Booming Economy, but at What Cost?
Moore remains bullish on economic growth heading into the next year, insisting that lower energy prices, strong markets, and rising incomes add up to a “smoking” economy. But he cautioned that even in times of prosperity, Washington’s appetite for subsidies is growing rather than shrinking.
From farmers to health care to broad-based stimulus checks, both major parties are drifting toward a politics of permanent payouts—funded by either deficits or dubiously framed tariff revenues.
“Show me a company or an economy that’s built on writing checks,” Moore said, “and I’ll show you one heading for trouble.”
Whether the Trump administration can maintain a booming economy while resisting the political temptation to broaden federal largesse remains an open question—one Moore suggests may determine how long that boom lasts.
Photo by Dan Meyers on Unsplash