Word is circulating that The Donald is considering issuing stimulus checks to low-income Americans. The idea is simple, direct, and no doubt politically tempting. After all, handing out freshly printed money is a surefire way to grab headlines and curry favor with economically squeezed voters.

Credit: Geiger Capital

The populist wing of the Republican Party loves it. Give people their money back! Stick it to the elites! It feels like bold retail politics in action. Suppose Trump pulls the trigger on this. In that case, he risks walking straight into the same inflationary buzzsaw that gutted Biden’s presidency—and alienating the very voters he wants to win back for the 2026 midterm elections.

We’ve Seen This Movie Before

Let’s take a step back.

Between 2009 and 2020, the Federal Reserve unleashed a historic monetary experiment. It expanded the money supply via zero interest rates and massive asset purchases. Trillions of dollars flooded the banking system. Austrian economists and internet doomsayers alike screamed that hyperinflation was imminent.

But the price of milk? Still reasonable. Bread? Not $10 a loaf. Consumer price inflation barely budged, hovering around 1.6% per year.

So what happened?

The money never left the financial system. Banks sat on reserves. Hedge funds bought stocks. Corporations borrowed cheaply and bought back shares. It was asset inflation on steroids, but for the average American, CPI stayed tame. The Austrians were wrong, not because their logic was bad, but because they missed a critical piece: transmission. The Fed created the money, but it didn’t circulate through the real economy.

The Game Changed in 2020

Then came COVID.

Suddenly, it wasn’t just the Fed. It was Congress. Starting in April 2020, the U.S. government directly deposited nearly $1 trillion in stimulus checks into Americans’ bank accounts. These weren’t loans or tax credits. This was cash. Spendable, immediate, universal.

And Americans did just that—they spent it. On Amazon. On DoorDash. On rent, car repairs, and finally taking that Florida vacation. Demand surged, while supply chains were still broken from lockdowns.

Inflation didn’t trickle—it exploded. CPI inflation rose from just over 2% pre-pandemic to a blistering 9% in mid-2022. And it didn’t stop with prices. Real wages lagged. Interest rates spiked. Home affordability collapsed.

The painful irony? These checks were supposed to provide relief. Instead, they eroded purchasing power for the very people they were meant to help. It was the fiscal equivalent of giving someone a glass of water—and then setting their kitchen on fire.

Fiscal Policy Is the Inflation Trigger

Here’s the core misunderstanding that doomed Biden’s team—and could now haunt Trump if he’s not careful.

The Fed can create potential inflation by expanding the money supply. But it’s fiscal policy—real government spending and transfers—that unleashes that inflation into the economy. Monetary policy is a loaded gun. Fiscal policy pulls the trigger.

This isn’t speculation. The St. Louis Fed, the Mercatus Center, and the University of Chicago all confirmed it in their studies. The data is unambiguous: the 2021–2023 inflation surge was driven primarily by direct fiscal transfers, not the Fed’s quantitative easing, which had been happening for over a decade without similar CPI spikes.

Biden Paid the Political Price—Literally

This inflation episode was an economic event and a political catastrophe.

Biden’s approval ratings cratered as prices rose. Gas. Groceries. Rent. Families felt the squeeze, and no one remembered their $1,200 checks when a dozen eggs cost $8. The very policy that was meant to make people feel wealthier made them feel poorer.

Voters don’t reward you for yesterday’s handouts. They punish you for today’s pain. That’s a big reason why Biden is now a disgraced, retired former President..

If Trump goes down this same road—especially with inflation already sticky and interest rates still high—he may reap the same whirlwind.

A Better Path Forward

Trump shouldn’t copy Biden‘s biggest mistake of printing stimmy checks. He needs to win the 2026 midterms to not become a lame duck president for the last two years of his administration, and there are far better ways to do that.

Targeted tax cuts. Deregulation to lower energy costs. Incentives for domestic production. These policies help real people without flooding the system with more demand than supply. They reduce friction rather than throw accelerant on it.

Stimulus checks feel good for about five minutes. Then prices go up, the Fed tightens, the economy wobbles, and you’re stuck managing the fallout.

Wrap Up

Trump should know better. The MAGA base doesn’t want more Biden-style handouts. They want stability. They want affordability. They want an economy that works, not one that overheats every election cycle.

The first round of stimulus checks lit the inflationary fire that torched Biden’s presidency. Issuing another round—especially under Trump’s banner—wouldn’t just be a policy mistake.

It would be economic malpractice masquerading as populism.

Mr. President, don’t fall for it. Don’t repeat the disaster that Biden walked into with open arms. You can help working families—just don’t do it with checks that boomerang.

Because the last time we tried that, it wasn’t a gift.

It was a grenade.