In response to calls for economic assistance, the Trump administration has announced a plan to provide American taxpayers with $5,000 “DOGE Dividends,” funded by savings achieved through improved government efficiency.
While the proposal seeks to offer financial aid, some analysts have raised concerns about its potential to increase inflation. However, James Fishback, CEO of investment firm Azoria and the architect of the DOGE Dividend proposal, has defended the plan as a non-inflationary approach that redirects federal savings back to the taxpayers.
“By giving citizens a stake in DOGE’s savings, they will be encouraged to report any occurrences of waste, fraud, and abuse, which in turn enhances the overall savings of DOGE and increases the size of President Trump’s DOGE Dividend checks,” Fishback elaborated to Newsweek. “The more DOGE saves, the less expenditure the government incurs, which results in lower inflation. It’s simple.”
Newsweek contacted the White House and the U.S. Department of the Treasury for comments on Thursday.
Significance
According to President Donald Trump’s statements on Wednesday, which echoed Fishback’s proposal, the initiative aims to redistribute 20 percent of federal savings from Department of Government Efficiency (DOGE) programs directly to American taxpayers.
With inflation rates currently at a still-high 3 percent, concerns abound that such significant payouts could create further volatility. Some experts argue that this injection of direct financial benefits might increase consumer spending, thereby driving inflation rates up, similar to the effects previous stimulus checks had on the economy.
Nonetheless, Fishback underscored the differences from past policies on X. “… It’s not 2021, a time marked by sweeping, indiscriminate transfer payments amid a severe labor shortage and disrupted supply chains,” he emphasized.
Andrew Harnik/Getty Images
Key Takeaways
The proposed DOGE stimulus check initiative mirrors similar federal efforts to provide direct financial assistance to citizens. During the COVID-19 pandemic, the government issued stimulus checks, offering immediate relief but also contributing to the highest inflation rates in decades, which peaked at around 7 percent toward the end of 2021.
The intended $5,000 “DOGE Dividends” aim to deliver relief while, as Fishback emphasized, steering clear of the inflation-related pitfalls of 2021. He argues that these payments, explicitly linked to tangible savings and not sourced from debt, represent a more sustainable model for assistance.
Steve Hanke, a professor of applied economics at Johns Hopkins University and a former member of President Reagan’s Council of Economic Advisors, expressed to Newsweek that the DOGE checks would not significantly alter inflation trends. He referenced a 2023 article he wrote for the World Economics Journal, asserting that inflation largely results from increases in the money supply, rather than fiscal policies.
On the contrary, Lance Roberts, chief investment strategist and economist at RIA Advisors, commented to Newsweek that there would be some effect, although not as pronounced as that of previous stimulus checks.
“While the inflationary ramifications of the DOGE dividend are likely to be less severe than what we faced in 2021, when we issued stimulus checks while the economy was under lockdown, it will still impact inflation,” Roberts noted.
Although the DOGE stimulus check would not escalate the national debt, it could divert funds from other essential initiatives. This reallocation might preclude opportunities for long-term economic strengthening or investments with significant returns and societal benefits.
The distribution of these checks could coincide with other economic issues, such as stagnant wage growth and increasing living expenses.
Public Reactions
James Fishback, CEO of Azoria and creator of the DOGE Dividend proposal, shared with Newsweek: “For every $5 saved by DOGE, $1 will be returned to taxpayers. The DOGE Dividends are solely allocated to tax-paying households (approximately 79 million households), which are far more likely to apply this check towards debt repayment or to increase their emergency funds, both of which do not contribute to inflation.”
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 invariably triggered by shifts in the money supply. I do not know of any substantial uptick in inflation that has not been preceded by a significant increase in money stock.”
Lance Roberts, chief investment strategist and economist at RIA Advisors, relayed to Newsweek: “According to the US Debt Clock, DOGE has saved about $50 billion so far, which equates to roughly $312.50 for the approximately 160 million US taxpayers. If $5,000 checks are distributed, that results in an outlay of $800 billion, which far exceeds the savings achieved. This would undoubtedly heighten the deficit, leading to raised interest rates and causing issues for everyday consumers looking to buy cars or secure mortgages.”
Kimberly Clausing, an economist and professor at UCLA School of Law, remarked to Newsweek: “Currently, this dividend seems speculative at best due to insufficient concrete budget savings demonstrated. While government layoffs could harm services such as forest management, public safety, and tax filing, they aren’t likely to have a meaningful impact on the budget deficit, largely because personnel expenses make up a small portion of the U.S. federal budget.
Furthermore, the Trump administration’s budget proposals threaten to exacerbate the federal budget deficit, as illustrated by the House budget resolution, which advocates for trillions in additional debt. Thus, any dividend issued beyond the actual savings is set to incur costs that will escalate deficits in the future. Notably, some layoffs may inadvertently increase the deficit, such as the termination of IRS employees who would otherwise regulate and enforce our tax system.”
Future Developments
While concerns linger regarding the DOGE stimulus check’s ability to incite inflation, Fishback maintains that the long-term benefits will include enhanced economic efficiency and reduced government intervention.
“In the future, DOGE Dividends will yield even greater savings and effectiveness, liberating the economy and empowering citizens who have long been restrained by bureaucratic oversight,” Fishback conveyed to Newsweek.
