According to the US Debt Clock, the Department of Government Efficiency (DOGE) has identified around $120 billion in savings. Treasury Secretary Scott Bessent indicated that the task force led by Elon Musk has potentially saved taxpayers over $50 billion in just one month. Some legacy media sources argue these claims are inflated, suggesting that the actual savings are significantly lower. Regardless of the actual figures, the new administration plans to distribute these savings to taxpayers via DOGE dividend checks. But is this a prudent allocation of resources for an indebted federal government?
The DOGE Dividend Check
In a memo dated February 18 shared on the social media platform X, James Fishback, CEO of investment firm Azoria, proposed that President Donald Trump and billionaire Elon Musk announce tax refund checks that would be funded entirely by a portion of the savings accrued through DOGE, distributing $5,000 to each taxpayer by July 2026 for 79 million households.
The executive from SpaceX and Tesla Motors seemed to support the idea of a DOGE dividend, stating he would “check with the President.” Musk reportedly did consult Trump, who appeared to be on board with the notion. At an investment conference in Miami the following day, Trump announced that the US government intends to allocate 20% of the DOGE savings to American citizens, with another 20% dedicated to reducing the national debt.
Stephen Miller, the deputy White House Chief of Staff, clarified the approach. “The mechanism at play is that when savings are realized, they can either be returned to taxpayers, used to pay off our creditors, or rolled into the next year’s budget,” Miller stated during a briefing on February 19. “In other words, it can simply be transferred into the next fiscal period while simultaneously lowering overall expenditures.”
Here We Go Again
Supporters assert that a DOGE-funded stimulus check would equate to money being returned to the American public, serving as restitution for the years of mismanagement and squandering of taxpayer funds by politicians and bureaucrats. While this is appealing in concept, the actual implications are more complex.
The United States is still feeling the repercussions of previous rounds of pandemic-related monetary support. During the health crisis, eligible individuals received payments of $1,200 in March 2020, $600 in December 2020, and $1,400 in March 2021. Estimates differ, but the Federal Reserve Bank of St. Louis suggests that the stimulus contributed nearly 3% to the 7.9% annual inflation rate observed in February 2022, due to simple supply and demand economics—too much money chasing too few goods.
As we look ahead to early 2025, inflation persists in the US economy.
Nevertheless, proponents argue that the DOGE dividend checks would not exacerbate inflation for several reasons. Firstly, these checks would be funded solely through DOGE-derived savings rather than budget deficits. Secondly, recipients would likely save the funds instead of spending them frivolously, which would ensure a more effective economic usage of the money. Finally, this initiative could motivate countless individuals to re-enter the workforce, allowing them to contribute positively to society.
On the other hand, the estimated cost of this initiative stands at $400 billion, roughly half of the annual interest expenses of the government. This is a critical figure, as Musk has claimed that DOGE could help reduce the federal deficit by half from the existing $2 trillion. Therefore, even if this ambitious goal were met, the US government would still face a negative cash flow situation. Implementing such public policy creates an environment where the nation operates with a deep budget deficit rather than a surplus, alongside a staggering $36 trillion national debt and $200 trillion in unfunded liabilities.
Nancy Pelosi’s Crumbs 2.0
Do you remember when Rep. Nancy Pelosi (D-CA) dismissed companies providing raises, bonuses, and employee benefits following the Tax Cuts and Jobs Act as mere crumbs? Today, another progressive lawmaker seems to be echoing her sentiments. Rep. Jasmine Crockett (D-TX) recently remarked that the US government is “not in the business of giving out money” and that a $5,000 check would do little to aid the American populace.
This viewpoint is perplexing, considering that the United States has long been in the business of providing financial assistance to foreign nations, terrorist organizations, and undocumented immigrants. Additionally, let’s not overlook the stimulus checks distributed during the crisis. Furthermore, a $5,000 payment could significantly assist many families in reducing credit card debt or covering utility bills for the year—this is not an insignificant amount.
Ultimately, despite the temptation to distribute DOGE dividend checks widely, the Trump administration should remain cognizant of its obligation to uphold fiscal responsibility.
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