Trump considers the idea of a DOGE stimulus check
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President Trump said he's considering redistributing 20% of the money saved through Elon Musk's DOGE cuts to Americans.
Why it matters: It raises questions about the potential inflationary impact of a "DOGE dividend," while economists are still debating the effect of other direct payments under previous administrations.
Driving the news: Trump floated the idea at the FII Priority Summit in Miami on Wednesday, after Musk said on X that he'd confer with the president about it.
- "There's even a — under consideration, a new concept where we give 20% of the DOGE savings to American citizens and 20% goes to paying down debt," Trump said.
- The idea came from James Fishback, CEO of investment firm Azoria and an outspoken supporter of Trump and Musk's economic agenda.
- Fishback proposed that 79 million of the 132 million U.S. households should be eligible for 20% of DOGE's $2 trillion savings target, which comes out to $5,000 for each of those households.
- Musk responded to the pitch on X on Tuesday, saying that he would run it past Trump.
- "We wanted to help make DOGE real for millions of Americans. They deserve a portion of the savings DOGE will deliver under President Trump's leadership," Fishback said.
How feasible are DOGE dividend checks?
Between the lines: Musk himself has retreated from the original DOGE savings target, calling that $2 trillion a "best-case outcome" and saying that there was only a "good shot" at securing half of it.
- As Axios's chief economic correspondent Neil Irwin notes, $2 trillion is impossible without eviscerating massive chunks of government that Americans rely on, and it's hard to imagine Congress approving the kinds of spending cuts it would take to get anywhere close to that.
- Reconciliation instructions approved by the House Budget Committee last week incorporate $2 trillion in spending cuts — but that's over the next decade, not a single year. And it still may be too much for Republican moderates to stomach.
How could DOGE dividend checks impact inflation?
Zoom out: Americans have received three rounds of direct payments from the government under both Trump and Biden, and there's still a lot of uncertainty about whether — and how much — those payments impacted inflation.
- Many economists agree that giving people more spending money worsened inflation, but disagree about the extent of it, especially with factors such as supply chain tie-ups also at play.
What they're saying: Judge Glock, director of research at the Manhattan Institute, told Scripps News that a DOGE check opens up a Pandora's Box of potential issues.
- "It would increase the deficit, it would increase immediate consumer spending, and that would have inflationary consequences which is something we don't want right now," Glock said. "We do have an over $1 trillion a year budget deficit. So, if we're looking at savings in the federal government, we should certainly focus on trying to reduce that deficit first before handing out any extra money to our citizens."
