In light of requests for economic support, the Trump administration has introduced a plan to grant American taxpayers $5,000 in “DOGE Dividends,” financed by savings derived from enhanced government efficiency.
While the initiative aims to provide financial support, some analysts have voiced concerns over its potential inflationary impact. However, James Fishback, CEO of investment firm Azoria and the mastermind behind the DOGE Dividend proposal, has defended the plan as a non-inflationary measure that channels federal savings back to the citizens.
“By empowering citizens to benefit from DOGE’s savings, they will be incentivized to report instances of waste, fraud, and abuse, which will, in turn, bolster the overall savings of DOGE and enlarge the Dollar amounts of President Trump’s DOGE Dividend checks,” Fishback explained to Newsweek. “The more DOGE saves, the less spending the government needs to do, which ultimately leads to lower inflation. It’s straightforward.”
Newsweek reached out to the White House and the U.S. Department of the Treasury for comments on Thursday.
Importance
As noted in President Donald Trump’s remarks on Wednesday, reflecting Fishback’s proposal, the initiative seeks to redistribute 20 percent of federal savings from Department of Government Efficiency (DOGE) programs straight to American taxpayers.
Given that inflation rates currently stand at a persistently high 3 percent, there are concerns that such substantial payouts could induce further volatility. Experts warn that this injection of direct financial assistance might boost consumer spending, potentially pushing inflation rates higher, akin to the impact previous stimulus checks had on the economy.
Nevertheless, Fishback emphasized the contrasts with previous policies on X. “… This isn’t 2021, a year defined by expansive, indiscriminate transfer payments during a significant labor shortage and disrupted supply chains,” he pointed out.
Andrew Harnik/Getty Images
Essential Points
The proposed DOGE stimulus check initiative is reminiscent of earlier federal endeavors aimed at providing direct financial aid to citizens. During the COVID-19 pandemic, the government distributed stimulus checks to offer immediate relief, but it also contributed to unprecedented inflation rates, which peaked at around 7 percent by the end of 2021.
The anticipated $5,000 “DOGE Dividends” are designed to provide relief while, as Fishback stressed, avoiding the inflation-related pitfalls of 2021. He contends that these payments, directly linked to tangible savings and not derived from debt, represent a more sustainable assistance model.
Steve Hanke, a professor of applied economics at Johns Hopkins University and a former member of President Reagan’s Council of Economic Advisors, shared with Newsweek that the DOGE checks would likely not have a significant impact on inflation trends. He referred to a 2023 article he wrote for the World Economics Journal, asserting that inflation primarily arises from increases in the money supply, rather than fiscal policies.
Conversely, Lance Roberts, chief investment strategist and economist at RIA Advisors, communicated to Newsweek that there could be some effects, although not as pronounced as those stemming from prior stimulus checks.
“While the inflationary effects of the DOGE dividend are expected to be less severe than those we faced in 2021, when stimulus checks were disseminated while the economy was largely shut down, there will still be an impact on inflation,” Roberts noted.
Even though the DOGE stimulus check wouldn’t increase the national debt, it could divert resources from other critical initiatives. This shift might hinder prospects for long-term economic fortification or investments that yield significant returns and societal benefits.
The rollout of these checks might coincide with other economic challenges, such as stagnating wage growth and rising living costs.
Public Feedback
James Fishback, CEO of Azoria and creator of the DOGE Dividend proposal, told Newsweek: “For every $5 saved by DOGE, $1 will be returned to taxpayers. The DOGE Dividends are exclusively designated for tax-paying households (around 79 million households), who are much more likely to utilize this check towards debt repayment or to bolster their emergency reserves—both of which do not fuel inflation.”
Steve Hanke, a professor of applied economics at Johns Hopkins University and a former member of President Reagan’s Council of Economic Advisors, remarked to Newsweek: “Inflation is invariably spurred by changes in the money supply. I am unaware of any significant spike in inflation that has not been preceded by a considerable uptick in money stock.”
Lance Roberts, chief investment strategist and economist at RIA Advisors, conveyed to Newsweek: “According to the US Debt Clock, DOGE has saved approximately $50 billion thus far, which translates to about $312.50 per the roughly 160 million US taxpayers. If $5,000 checks are disbursed, that totals an outlay of $800 billion, which significantly surpasses the achieved savings. This would unquestionably increase the deficit, resulting in higher interest rates and challenges for everyday consumers seeking to purchase vehicles or secure mortgages.”
Kimberly Clausing, an economist and professor at UCLA School of Law, expressed to Newsweek: “At this point, this dividend appears speculative at best due to the lack of demonstrable concrete budget savings. While potential government layoffs could negatively impact services like forest management, public safety, and tax processing, they are unlikely to substantially affect the budget deficit, primarily because personnel expenses comprise a small portion of the U.S. federal budget.
Furthermore, the Trump administration’s proposed budget may further exacerbate the federal budget deficit, as the House budget resolution suggests trillions in additional debt. Therefore, any dividend issued beyond the actual savings is likely to incur costs escalated in the future. Critically, some layoffs might unintentionally increase the deficit, such as the dismissal of IRS employees who would otherwise manage and enforce our tax system.”
Future Prospects
While anxieties persist around the DOGE stimulus check’s potential to trigger inflation, Fishback remains optimistic about the long-term benefits, including improved economic efficiency and decreased government oversight.
“In the future, DOGE Dividends will generate even greater savings and efficiency, freeing the economy and empowering citizens who have long been restrained by bureaucratic regulations,” Fishback told Newsweek.
