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By Claire Dickey
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Amid calls for economic relief, the Trump administration has proposed the distribution of $5,000 "DOGE Dividends" to American taxpayers, funded by savings from government efficiency efforts.
While the move is intended to provide financial assistance, some experts have raised concerns about the potential for increased inflation. However, James Fishback, CEO of investment firm Azoria and the architect of the DOGE Dividend proposal, has defended the initiative as a non-inflationary measure that reallocates federal savings back to tax-paying households.
"Giving the people a stake in DOGE's savings will incentivize them to call out waste, fraud, and abuse wherever they see it, increasing the total amount of money that DOGE saves and increasing the size of President Trump's DOGE Dividend checks," Fishback told Newsweek. "The more DOGE saves, the less the government spends, and the lower inflation is. It's that simple."
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Newsweek reached out to the White House and the U.S. Department of the Treasury for comment via email on Thursday.
Why It Matters
According to remarks made by President Donald Trump on Wednesday, echoing Fishback's proposal document, the stimulus check concept would aim to redistribute 20 percent of federal savings from Department of Government Efficiency (DOGE) efforts directly to American citizens.
Inflation rates, which have settled to a still-elevated level of 3 percent, could be further destabilized by such large-scale disbursements. Some experts say such a direct fiscal infusion could spike consumer spending, pushing inflation rates higher, pointing to the effects previous stimulus checks had on the economy.
However, Fishback emphasized the difference from past policies on X. "... It's not 2021, which saw huge, indiscriminate transfer payments during a massive government-fueled labor shortage and supply chain dislocation," he wrote.
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What To Know
The proposed DOGE stimulus check initiative mirrors past federal efforts to distribute financial aid directly to citizens. During the COVID-19 pandemic, the government issued stimulus checks that provided immediate financial relief but also contributed to the highest inflation rates observed in decades, peaking at around 7 percent by the end of 2021.
The proposed $5,000 "DOGE Dividends" are intended to provide relief but, as Fishback asserted, in a manner that does not repeat the inflationary missteps of 2021. He maintained that the controlled nature of these payments, linked directly to demonstrable savings and not funded by debt, presents a sustainable approach to relief.
Steve Hanke, a professor of applied economics at Johns Hopkins University, who served on President Reagan's Council of Economic Advisors, told Newsweek the DOGE check will not change the trajectory of inflation. He referenced a 2023 World Economics Journal article he authored, which argues that inflation is primarily driven by increases in the money supply, rather than by fiscal policies.
Conversely, Lance Roberts, chief investment strategist and economist at RIA Advisors, told Newsweek it will have some impact, though not to the extent of previous stimulus checks.
"While the inflation impact of the DOGE dividend won't be as great as we saw in 2021 when we sent stimulus checks and shut down the economy, crimping supply, it will impact inflation nonetheless," Roberts said.
Although the DOGE stimulus check wouldn't increase the national debt, it could shift funds away from other important uses. Redirecting these funds might mean missing out on chances to strengthen the economy over the long run or to invest in areas that could provide significant returns or widespread benefits to society.
The timing of these checks could coincide with other economic pressures as well, such as wage growth stagnation and the rising cost of living.
What People Are Saying
James Fishback, CEO of investment firm Azoria and architect of the DOGE Dividend proposal, told Newsweek: "For every $5 of DOGE savings, $1 goes back to taxpayers. DOGE Dividends are sent exclusively to tax-paying households (of which there are 79 million households), who are far more likely to use this check to pay down debt or add to their rainy day fund, neither of which is inflationary."
Steve Hanke, a professor of applied economics at Johns Hopkins University, who served on President Reagan's Council of Economic Advisors, told Newsweek: "Inflation is always caused by changes in the money supply. I know of no significant increases in inflation that have not been preceded by a significant increase in the stock of money."
Lance Roberts, chief investment strategist and economist at RIA Advisors, told Newsweek: "... According to US Debt Clock, DOGE has only saved about $50 billion so far, which is roughly $312.50 per the roughly 160 million US tax payers. If they send out $5000 checks that is an expenditure of $800 Billion which is FAR in excess of what savings have been accomplished. Which would certainly increase the deficit leading to higher interest rates, causing pain to the average consumer trying buy a car or get a mortgage."
Kimberly Clausing, economist and professor at the UCLA School of Law, told Newsweek: "Right now this dividend is pure fantasy, as they've shown very little in the way of concrete budget savings. While their government layoffs will cause a lot of mayhem in terms of the provision of government services in areas like forest management, public safety, and tax filing, they will not make an important dent in the budget deficit, for the simple reason that personnel costs are a tiny fraction of the US federal budget.
Further the Trump budget proposals risk exploding the US federal budget deficit; see, e.g., the House budget resolution, which calls for trillions of dollars in additional debt. So any such dividend, even if issued in excess of actual savings, will come at the expense of higher deficits down the road. It is also important to note that some layoffs actually increase the deficit, including the firing of IRS employees that would otherwise administer and enforce our tax system."
What Happens Next
While concerns persist about the DOGE stimulus check's potential to spur inflation, Fishback argued the long-term benefits will include greater economic efficiency and reduced bureaucratic interference.
"Long-term, DOGE Dividends will drive even more savings and efficiency, which unburdens the economy and empowers Americans who have been held back for too long by DC bureaucrats who want to micromanage their lives, families, and businesses," Fishback told Newsweek.
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