What If DOGE Paid Out Stimulus Checks Monthly?
Written by
G. Brian Davis
Edited by
Amber Barkley
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President Donald Trump and the Department of Government Efficiency (DOGE) have floated the idea of “DOGE dividend” tax refunds.
Originally, the idea involved taking 20% of the cost savings from DOGE and sending it back to taxpayers. At the initial $2 trillion savings goal, that translated to $5,000. Even DOGE and the president have since acknowledged that $2 trillion is unrealistic, however, and scaled that back — first to $1 trillion and then to $150 billion for fiscal year 2026.
As a thought experiment, what would happen if DOGE sent out a portion of its savings to taxpayers as monthly stimulus payments?
Reduced Risk of Recession
The name says it all: “Stimulus” payments are designed to stimulate the economy.
“One benefit of the DOGE payments idea is that it likely decreases the risks of recession,” explained economist Brandon Parsons, Ph.D. “Consumer purchasing would increase, as disposable income increases for those who obtain these DOGE payments.”
Consumer spending powers the U.S. economy, and one of the risks of the president’s tariff initiative is a suppression of spending. Stimulus payments would juice spending — but also fan inflation.
Higher Inflation
Stimulus payments flooding into the economy means more money chasing the same goods and services — one of a few downsides to stimulus checks.
Or fewer goods, for that matter. Tariffs, especially crippling tariffs on Chinese imports, could lead to some imports ceasing to arrive at all. The New York Times reported that a slowdown in goods arriving from China has already begun.
You don’t need an elephant’s memory to recall an example. The many rounds of stimulus checks during and after the COVID-19 pandemic caused this exact phenomenon just a few years ago.
“This dynamic led to some of the highest inflation in over 40 years,” Parsons said. “We could have a similar situation where DOGE payments lead to inflationary pressures, as more money chases fewer goods.”
Slow or No Progress Reducing Federal Debt
If the Trump administration cuts spending only to, well, spend that money on stimulus payments, they’ve only changed where the money went.
Meanwhile, congressional Republicans have proposed budget bills that boost defense spending by $150 billion while raising the debt limit, per The Hill. That doesn’t sound like fiscal conservatism, just a shift in spending priorities.
George Carrillo, CEO of the Hispanic Construction Council, pointed out that a minority of true fiscal conservatives in Congress still worry about ballooning federal debt. “Budgets still have to go through Congress, where there remains quiet but real skepticism about stimulus spending and the $36 trillion national debt.”
Low or No Reduction in Taxes
Does it make more sense to send DOGE dividend checks or to simply lower future tax bills?
For fiscal conservatives who want to see lower taxes stimulate the economy, the more elegant solution is simply to lower tax rates moving forward, especially for lower- and middle-income Americans. Many raise an eyebrow at adding to the machinery of government with convoluted systems to send tax money back to those who paid it.
The only real advantage of DOGE payouts — lower recession risk — could more cheaply and easily be accomplished through lower interest rates. But that creates the same problem of higher inflation.
In short, don’t get your hopes up for a check from DOGE any time soon.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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Sources
- Brandon Parsons, Ph.D.
- George Carrillo, Hispanic Construction Council
- The New York Times, “West Coast Ports Brace for China Tariffs to Dent Import Volume Within Days.”
- The Hill, “Republicans unveil proposal for $150B in new Pentagon spending.”
