President Donald Trump and Elon Musk have emphasized the goal of “saving billions” in federal expenditures by cutting programs and dismissing numerous federal employees. They are now proposing the thought of returning these savings to taxpayers.
Recently, the notion of a $5,000 refund from the ongoing efforts to trim federal spending has been suggested, but it’s wise not to expect this money to hit your account anytime soon. Musk, along with his Department of Government Efficiency—or DOGE—has set a $2 trillion savings target to reach before any stimulus check might be a possibility, with the unofficial leader stating in January that he doubts the goal is achievable.
Here’s what you should understand regarding the potential for stimulus checks for Americans.
What sparked the idea for a DOGE stimulus check?
The concept did not originate from Musk or Trump but rather from “Anti-woke” investor James Fishback, the CEO and co-founder of Azoria Partners, who proposed this idea on X on February 14.
Fishback mentioned Musk in his post and urged the billionaire to consider a $5,000 check for the American populace.
“American taxpayers merit a ‘DOGE Dividend’: 20% of the funds saved by DOGE should be distributed back to hardworking Americans as a tax refund check. It was their money to begin with,” Fishback tweeted.
“@ElonMusk, let’s make this happen! This is how we restore trust in our government,” he asserted.
Elon Musk indicates he will consult with Trump regarding a potential dividend check
Musk seemingly sought Trump’s perspective on this matter and responded to Fishback’s post, stating, “Will confer with the President.”
Will Trump issue a stimulus check?
Despite the uncertainties surrounding DOGE’s objective, Trump continues to deliberate the notion of the stimulus check. Last week, he mentioned that the administration is contemplating providing 20% of “DOGE savings” to citizens.
On Wednesday, Trump touched on the stimulus check concept on two occasions.
“We’re considering allotting 20% of DOGE savings to American citizens and using 20% for debt repayment,” Trump remarked during the Saudi-sponsored FII PRIORITY Summit in Miami Beach.
Later, while aboard Air Force One, he reiterated enthusiasm concerning the proposal, stating, “I support it. A 20% dividend, if you will, from the savings we achieve by tackling waste, fraud, and abuse, among other issues,” according to reports from The Associated Press.
What does 20% of $2 trillion amount to?
Calculating the figures, 20% of DOGE’s $2 trillion target equates to $400 billion. If stimulus checks were to be distributed among Americans aged 18 and older—258.3 million individuals according to the 2020 Census data—it would result in just over $1,500 per person.
To achieve $5,000 for every American over 18, the total would need to be around $1.3 trillion.
In 2022, the Government Accountability Office reported that the three rounds of Economic Impact Payments distributed during the COVID-19 pandemic reached about 165 million Americans. If we apply those figures, the $400 billion divided among this population would yield approximately $2,400 per person.
What were the 2020 stimulus checks like?
In 2020, Trump authorized a $2 trillion bipartisan stimulus package, which included checks for individuals who had filed taxes in the last two years, had veterans benefits, or claimed Social Security benefits, alongside funding for small business loans, grants, and additional unemployment benefits to address the economic fallout from the COVID-19 crisis.
For context, the three stimulus checks issued to Americans during 2020 and 2021 combined totaled around $931 billion in financial relief, per reports from the Government Accountability Office in 2022.
Here’s a breakdown of what the IRS distributed with each stimulus payment and the eligible recipients:
- The first stimulus payment in March/April 2020 provided up to $1,200 per eligible adult and $500 for each qualifying dependent.
- The second stimulus payment in December 2020 offered up to $600 per eligible person (adult, child, or dependent).
- The third stimulus payment in March/April 2021 provided up to $1,400 per eligible person (adult, child, or dependent).
What impact could a $5,000 stimulus check have on the economy?
Economic experts view the proposed DOGE dividend unfavorably.
“This would escalate the deficit, prompt an immediate rise in consumer spending, and trigger inflationary effects—something we want to avoid right now,” Judge Glock, research director at the Manhattan Institute, informed Scripps News.
If you think prices are high now, this situation could exacerbate it.
If DOGE begins “distributing large checks to vast numbers of individuals, that would significantly heighten inflation since Trump’s policies on tariffs lead to increased prices for goods and services,” noted Jay Zagorsky, a professor at Boston University’s Questrom School of Business, in a CBS News report.
Moreover, Trump’s National Economic Council director, Kevin Hassett, indicated in a press briefing on Thursday that if a stimulus check were issued, it would not affect inflation because the government already plans to allocate those funds.
“If we don’t spend government money and we return it to the populace, and they utilize it completely, then everything balances out,” he explained, as reported by financial news site Investopedia. “However, they might choose to save a significant portion, thus curbing inflation.”
What are the chances of a stimulus check being issued?
The likelihood of receiving a check seems quite low.
Elaine Kamarck, a senior fellow in governance studies at the Brookings Institution, labeled the DOGE dividend concept as “ridiculous,” according to The Associated Press.
“There’s no actual money allocated for this, and certainly not sufficient funds to significantly benefit taxpayers,” Kamarck contended, having collaborated with former Vice President Al Gore on initiatives to reduce government waste during the Clinton administration. “The individual merely romanticizes concepts,” she remarked, alluding to Musk.
