President Donald Trump says he’s contemplating the idea of direct payments to Americans floated by Elon Musk, the planet’s wealthiest man and arguably Trump’s most influential adviser, via savings from Musk’s sweeping and controversial cost-cutting initiatives, a payout program with a public roadmap which could lead to further inflation — and is potentially far less in lump sum payments than advertised.
Elon Musk and President Donald Trump appear at the White House last week.
Getty Images
Key Takeaways
- “A new concept where we give 20% of the DOGE savings to American citizens” is “under consideration,” Trump said Wednesday at a conference in Miami, adding another 20% would go toward the $36.2 trillion national debt (he didn’t specify where the remaining 60% would go).
- Trump’s comments came a day after Musk, who leads the Department of Government Efficiency (DOGE), said he’d “check” with Trump on the idea of a “DOGE dividend,” pitched by James Fishback, the CEO of the “anti-woke” boutique investment firm Azoria and a reported close associate of Vivek Ramaswamy, briefly the co-chief of DOGE.
- Fishback’s four-page formal proposal calls for a “tax refund check” sent to all American taxpayer households after DOGE’s announced end date of July 2026.
- The idea of DOGE payouts took off, reaching Trump within five days of Fishback first floating the idea on Musk’s X social media site in a video shot from a car, equating the measure to a company offering a “money-back guarantee.”
- The proposal estimates each household would get a $5,000 check, a sum reached via the 20% refund allocation mentioned by Trump and dividing Fishback’s estimates of $2 trillion in DOGE savings among income tax-paying households.
How Much Will Doge Checks Be?
That $5,000 check relies on a highly ambitious (and potentially impossible) target for DOGE to cut that much in spending. DOGE so far claims it has cut $55 billion—using Fishback’s same thread of allocating 20% of DOGE savings to the dividend checks across about 79 million households, that would result in about $137.50 checks per household if they were sent now — and that’s even before accounting for the potentially inflated $55 billion figure, as Bloomberg estimates DOGE’s savings thus far are likely just $8.6 billion, which equates to a dividend check of just $21.50.
Tangent
Even Musk has seemingly abandoned the $2 trillion target, saying last month that represents a “best-case” scenario but he has a “good shot” at getting about half of that savings figure. “I’m not sure how they’ve gotten to that number,” now-Treasury Secretary Scott Bessent told Forbes in November about Musk’s $2 trillion target. If DOGE achieves $1 trillion in savings, that equates to a roughly $2,500 check via Fishback’s proposal.
Will Doge Dividend Checks Cause Inflation?
Payouts to a massive swath of citizens would immediately inject billions of dollars worth of cash into the economy, which would lead to higher prices based on the basic, core economic principle of supply and demand, as consumer spending demand would immediately increase without a change in supply. The DOGE dividends evoke memories of the $814 billion worth of COVID-19 stimulus checks greenlit by Trump and then-President Joe Biden in 2020 and 2021.
The government’s COVID stimulus programs were responsible for about a third of inflation by early 2022, according to the Federal Reserve Bank of St. Louis, as inflation peaked at a 41-year high of more than 9% by June 2022. Inflation is still well above policymakers’ long-held 2% target, coming in at 3% last month.
Fishback devoted about a quarter of his proposal to pushing back against inflation concerns, arguing his idea of sending checks to only net income tax-paying households, rather than all taxpayers, will lead to less inflationary consumption as higher-earning individuals have a “demonstrated propensity to save (not spend) the incremental dollar received.” Fishback also argued since the DOGE checks come from savings, not deficit spending, they won’t cause inflation.
Contra
Musk addressed concerns about the not so fiscally conservative DOGE dividend checks aired by Scott Adams, creator of the “Dilbert” cartoon who became a popular, albeit controversial, political and social commentator on Musk’s X social media site. ”The worst case scenario for DOGE is our government treating DOGE ‘savings’ as their new piggy bank, which I fear Congress is already doing,” Adams wrote Wednesday. Musk replied “we need to balance the budget as first priority.” The federal government ran a $1.8 trillion deficit last fiscal year, meaning there is significant work to achieve that first priority before moving to any taxpayer payouts.
This story was originally published on forbes.com and all figures are in USD.
Look back on the week that was with hand-picked articles from Australia and around the world. Sign up to the Forbes Australia newsletter here or become a member here.
