In response to demands for economic relief, the Trump administration has unveiled a plan to allocate $5,000 “DOGE Dividends” to American taxpayers, funded by savings generated through government efficiency initiatives.
Although the proposal aims to deliver financial support, some analysts have expressed worries about its potential to fuel inflation. Nevertheless, James Fishback, CEO of investment firm Azoria and the mastermind behind the DOGE Dividend proposal, has defended the initiative as a non-inflationary strategy that redirects federal savings back to households that pay taxes.
“Providing citizens with a share in DOGE’s savings will motivate them to report waste, fraud, and abuse whenever it occurs, thereby increasing the overall savings of DOGE and boosting the size of President Trump’s DOGE Dividend checks,” Fishback explained to Newsweek. “The more DOGE saves, the less money the government spends, which leads to lower inflation. It’s straightforward.”
Newsweek reached out via email to the White House and the U.S. Department of the Treasury for commentary on Thursday.
Significance
According to President Donald Trump’s remarks on Wednesday, which echoed Fishback’s proposal, the stimulus check concept is designed to redistribute 20 percent of federal savings derived from Department of Government Efficiency (DOGE) programs directly to American citizens.
Inflation rates, currently at a still-high level of 3 percent, might experience further instability due to such extensive payouts. Several experts argue that this direct financial injection could increase consumer spending, pushing inflation rates higher, referencing the impact previous stimulus checks had on the economy.
However, Fishback emphasized the distinctions from past policies on X. “… It’s not 2021, a period characterized by massive, indiscriminate transfer payments amidst a severe government-induced labor shortage and disrupted supply chains,” he stated.
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Key Takeaways
The proposed DOGE stimulus check initiative reflects similar federal efforts to deliver financial aid directly to citizens. Throughout the COVID-19 pandemic, the government distributed stimulus checks, providing immediate financial relief but also contributing to the highest inflation rates seen in decades, which peaked at around 7 percent at the close of 2021.
The suggested $5,000 “DOGE Dividends” aim to provide relief while, as Fishback emphasized, avoiding the inflation-related errors of 2021. He insists that these payments, distinctly tied to measurable savings and not funded by debt, represent a sustainable model for relief.
Steve Hanke, a professor of applied economics at Johns Hopkins University and a former member of President Reagan’s Council of Economic Advisors, stated to Newsweek that the DOGE checks will not alter inflation trends. He referenced a 2023 article he authored for the World Economics Journal, which claims that inflation primarily results from increases in the money supply, rather than fiscal measures.
Conversely, Lance Roberts, chief investment strategist and economist at RIA Advisors, informed Newsweek that there will be some impact, though not as substantial as previous stimulus checks.
“While the inflationary effects of the DOGE dividend will likely not be as severe as we experienced in 2021, during which we sent out stimulus checks while the economy was in lockdown, it will nevertheless affect inflation,” Roberts noted.
Although the DOGE stimulus check would not increase the national debt, it could redirect funds from other critical uses. This reallocation could lead to missed opportunities for strengthening the economy in the long term or investing in areas that may yield significant returns or extensive societal benefits.
The rollout of these checks could also occur concurrently with other economic challenges, such as stagnant wage growth and rising living costs.
Public Reactions
James Fishback, CEO of Azoria and architect of the DOGE Dividend proposal, told Newsweek: “For every $5 saved by DOGE, $1 is returned to taxpayers. DOGE Dividends are exclusively distributed to tax-paying households (approximately 79 million households), which are much more likely to utilize this check for debt repayment or to bolster their emergency funds, neither of which is inflationary.”
Steve Hanke, a professor of applied economics at Johns Hopkins University and a former member of President Reagan’s Council of Economic Advisors, told Newsweek: “Inflation is always instigated by shifts in the money supply. I am unaware of any substantial increases in inflation that have not been preceded by a notable increase in money stock.”
Lance Roberts, chief investment strategist and economist at RIA Advisors, told Newsweek: “According to the US Debt Clock, DOGE has only saved about $50 billion so far, which equals approximately $312.50 per the roughly 160 million US taxpayers. If they distribute $5,000 checks, that results in an expenditure of $800 billion, which is substantially beyond the achieved savings. This would unquestionably heighten the deficit, leading to increased interest rates and causing distress for average consumers seeking to purchase cars or obtain mortgages.”
Kimberly Clausing, an economist and professor at UCLA School of Law, told Newsweek: “Currently, this dividend appears to be pure speculation, as they have demonstrated minimal concrete budget savings. While government layoffs may disrupt services like forest management, public safety, and tax filing, they will not significantly reduce the budget deficit, primarily because workforce expenses account for a small fraction of the U.S. federal budget.
Moreover, the Trump administration’s budget proposals risk exacerbating the federal budget deficit, as evidenced by the House budget resolution, which calls for trillions in additional debt. Therefore, any dividend issued beyond actual savings will incur costs that lead to higher deficits down the line. Additionally, it’s essential to recognize that certain layoffs can actually increase the deficit, such as terminating IRS employees who would otherwise manage and enforce our tax system.”
Future Developments
While apprehensions remain regarding the DOGE stimulus check’s capacity to spur inflation, Fishback asserts that the long-term advantages will encompass greater economic efficiency and decreased governmental interference.
“In the long run, DOGE Dividends will foster even greater savings and efficiency, liberating the economy and empowering citizens who have long been constrained by bureaucratic management,” Fishback explained to Newsweek.
