A couple watches on a screen as U.S. President Donald Trump speaks on stage on the first day of the 2026 Republican National Convention at the American Airlines Center, where he proposed a $5,000 dividend.

President Donald Trump on Wednesday night floated the idea of a $5,000 dividend to every adult. Here are the numbers on what it would cost and the more complex analysis of what it mean for the economy.

The cost is relatively straightforward. According to the Census, 79% of the U.S. population of 342 million, as of last July, was 18 years or older, which means 270 million adults. A narrower 240 million subset of just U.S. citizens would bring the cost to $1.2 trillion.

That's a hefty amount, compared to the $1.8 trillion deficit the U.S. ran last year, which didn't include any stimulus. In an interview with Fox News after the speech, Vice President JD Vance said the funding source is the tariffs that the Trump administration has imposed.

Yale University's Budget Lab estimates that current-law tariffs - including the just-imposed tariffs on Canada - will raise about $1.9 trillion over the next 10 years. The White House has been in a battle to replace tariffs either set to roll off or invalidated by the Supreme Court, but even so it seems that the annual haul from tariffs will offset not even a fifth of the rebate.

So the rebate, assuming no other revenue sources, would be tacked onto the national debt, which as of Tuesday stood at $39.9 trillion, or a mere $32.4 trillion when just looking at the debt held by the public. Longer-term bond yields BX:TMUBMUSD30Y have been rising, in part on worries over its rapid growth.

The $5,000 dividend stands in comparison to the roughly $65,000 the median full-time worker makes, based on Labor Department statistics for the second quarter and annualizing them.

That's 8% of the typical salary, or enough to buy 9 Trump phones, even after tax.

Granted, the distributions would exacerbate inflation that stood at 3.4% per year in July.

While Americans would not spend all of the $5,000, a reasonable assumption is they would spend over 60%, or what economists call the marginal propensity to consume.

Last year, the total U.S. personal consumption expenditure last year was just under $21 trillion on some $26 trillion of personal income. People can and do spend more than just their income, through borrowing, tapping savings or selling assets.

All of this is to ignore what the Federal Reserve would react. It's a roughly 60% chance the Fed will hike this month, in a stimulus-free environment. The Fed hiking rates would limit the economic boost from such a proposal.

In any case, the Trump proposal is conditional on Republicans winning both chambers of Congress. According to the Kalshi prediction market, which is heavily influenced by polls, there's only a 15% chance of Republicans winning the House and the Senate.

-Steve Goldstein