00:00Trump doesn't have the money to pay every American adult $5,000 if Republicans win the
00:05midterms. That would cost $1.3 trillion. And even if he did, there's a better way to use that money
00:11that would really benefit Americans. The first thing the government should do, if it had that
00:16money, should be to reduce the federal budget deficit from $1.8 trillion down to $500 billion.
00:23That would cut the deficit from around 6% of gross domestic product down to about 1.5%.
00:29Here's where it gets interesting. Research from the Federal Reserve has found that every percentage
00:33point increase or decrease in that ratio raises or lowers interest rates by about a quarter of a
00:39percentage point. So cutting the deficit down to 1.5% of GDP would lower benchmark interest rates
00:45by 1.5 percentage points. On a typical U.S. home with a typical mortgage, that would put the monthly
00:51payment at around $1,900 at 5.5% versus more than $2,200 at 7%. But that's just housing.
01:00Rates would
01:01also likely fall on things like car loans, credit cards, and even small business loans. At a time
01:07when a lack of housing affordability is a primary reason why consumer sentiment is so low, Americans
01:12would probably favor policies that bring down the cost of living over time rather than a one-time
01:18stimulus check.
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