Topline
President Donald Trump is considering direct payments to Americans, a concept suggested by Elon Musk, the world’s richest individual and one of Trump’s significant advisers. This idea is based on funds saved through Musk’s extensive and controversial cost-reduction strategies. The proposal includes a public roadmap for a payout program, which may contribute to further inflation and could yield smaller lump sum payments than initially promoted.
Elon Musk and President Donald Trump at the White House last week.
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Key Facts
Trump mentioned on Wednesday at a conference in Miami that a “new concept” of distributing 20% of the DOGE savings to American citizens is “under consideration,” with an additional 20% allocated to the $36.2 trillion national debt, but he did not clarify where the remaining 60% would be directed.
His remarks followed Musk’s statement, who heads the Department of Government Efficiency (DOGE), indicating he would “check” with Trump regarding a proposed “DOGE dividend” by James Fishback, the CEO of the “anti-woke” investment firm Azoria, and a close ally of Vivek Ramaswamy, who briefly served as co-chief of DOGE.
Fishback’s formal proposal spans four pages and suggests sending a “tax refund check” to all American taxpayer households following DOGE’s end date of July 2026.
The DOGE payout idea gained traction quickly, reaching Trump within five days of Fishback initially introducing it on Musk’s X social media platform in a video filmed from a car, likening the initiative to a company offering a “money-back guarantee.”
The proposal anticipates that each household could receive a $5,000 check, calculated based on Trump’s mentioned 20% refund allocation from Fishback’s estimate of $2 trillion in DOGE savings, divided among tax-paying households.
How Much Will DOGE Checks Be?
The expected $5,000 check is based on an ambitious (and perhaps unattainable) goal for DOGE to achieve that level of savings. So far, DOGE claims to have realized $55 billion in cuts—if using Fishback’s logic of redistributing 20% of DOGE savings to dividend checks across roughly 79 million households, that would translate to about $137.50 per household if distributed immediately. However, this number comes before addressing the likely inflated $55 billion claim, as Bloomberg suggests DOGE’s actual savings so far are only about $8.6 billion, resulting in a dividend check of merely $21.50.
Tangent
Even Musk appears to have moved away from the $2 trillion goal, stating last month that it represents a “best-case” scenario, but he believes he has a “good shot” at achieving around half that savings. “I’m not sure how they’ve reached that figure,” now-Treasury Secretary Scott Bessent remarked to Forbes back in November regarding Musk’s $2 trillion target. If DOGE manages to achieve $1 trillion in savings, it would translate to approximately a $2,500 check according to Fishback’s proposal.
Will DOGE Dividend Checks Cause Inflation?
Distributing these payments to a large number of citizens would immediately infuse billions of dollars into the economy, likely leading to increased prices due to the fundamental economic principle of supply and demand, as demand for consumer spending would surge without a corresponding increase in supply. The concept of DOGE dividends brings to mind the $814 billion in stimulus checks approved for COVID-19 by Trump and then-President Joe Biden in 2020 and 2021. These government stimulus efforts contributed to about a third of inflation by early 2022, as noted by the Federal Reserve Bank of St. Louis, with inflation hitting a 41-year peak of over 9% by June 2022. Currently, inflation remains above the policymakers’ long-standing 2% target, recorded at 3% last month. Fishback dedicated a substantial portion of his proposal to counteracting inflation apprehensions, asserting that sending checks solely to net income tax-paying households would result in less inflation since higher earners tend to save rather than spend the additional money they receive. He further argued that since the DOGE checks derive from savings, not deficit spending, they would not trigger inflation.
Contra
Musk addressed fiscal concerns regarding the potentially excessive DOGE dividend checks raised by Scott Adams, the creator of “Dilbert,” who has garnered both popularity and controversy as a political and social commentator on Musk’s X social media platform. Adams expressed his worries, stating, “The worst-case scenario for DOGE is our government treating DOGE ‘savings’ as their new piggy bank, which I fear Congress is already doing.” Musk responded by emphasizing, “we need to balance the budget as our first priority.” With the federal government posting a $1.8 trillion deficit in the last fiscal year, significant efforts are needed to achieve that primary goal before any taxpayer payments can be considered.
Further Reading
