President Donald Trump is floating the idea of a $5,000-per-household stimulus check, dubbed a “DOGE dividend,” which Trump explained would come from taking 20% of the savings identified by the Elon Musk-led U.S. DOGE Service.
The idea, which stemmed from Azoria investment firm CEO James Fishback on Musk’s social media platform X, suggested that Trump and Musk “should announce a ‘DOGE Dividend’ — a tax refund check sent to every taxpayer, funded exclusively with a portion of the total savings delivered by DOGE.”
Musk engaged with the post and replied, “Will check with the President.”
According to NBC News, the stimulus check idea comes on the heels of Musk’s reported inability to secure $2 trillion in total savings. Last month, he walked back this claim and called it a “best-case outcome.”
But if the $2 trillion target is met, it would create a dividend pool of $400 billion, Forbes estimated. With an estimated 79 million households that would qualify, each would receive $5,063. A savings of $1 trillion, meanwhile, would amount to $2,531 per eligible household. Congress would have to approve the checks.
While the distributed funds would boost taxpayers’ finances, some argue that cutting large checks could fuel inflation and compete with the administration’s other tax priorities.
Others have wondered whether the checks could be used for down payments or housing-related expenses.
“My first thought was that the $5,000 check would help people who were having issues with insurance payments, because that would cover a lot of the additional costs for most homeowners,” HousingWire lead analyst Logan Mohtashami said. “However, the plan was to create lower demand to bring inflation and (mortgage) rates down, and a one-time check that size would boost demand for a wide variety of items.
“Any stimulus check isn’t going to help fight inflation if the goal is to make it go lower, because the dollars will mean more demand for goods and services.”
Not your pandemic allowance
Daryl Fairweather, chief economist for Redfin, disagrees. She said that the DOGE dividends wouldn’t be the same as pandemic-era stimulus checks.
“Those checks were deficit increasing because there weren’t any taxes to offset them. So, that’s why inflation increased, because all this extra money was flowing around in the economy and it wasn’t being taxed,” Fairweather explained.
“Theoretically, if they reduced government spending and reduced taxes, or gave a tax rebate in proportion to that, it would not increase inflation, because GDP would remain unchanged since government spending transforms into consumer spending.”
Fairweather went on to say that, “What I’m skeptical of is that they’re cutting money in a way that doesn’t make tax increases down the road more necessary or reduces government spending more down the road, or increases government spending because they’re having to make up for the lack of spending now. So, I don’t know if it’s possible even to do this kind of transfer without there being unintended consequences. That would reduce GDP.”
Fairweather acknowledged that across the board, interest rates would go down, and consumers could spend more money with the same level of inflation.
“But if they’re not efficiency improving, it’s efficiency reducing because they’re cutting things that the government needs,” she conceded. “And that could cause inflation.”
Jeff Tucker, principal economist at Windermere Real Estate, said he’s skeptical that $5,000 could cause much movement in terms of housing.
“I’m more focused on the tariffs, which are a very broad-based fiscal headwind for households that are going to raise the cost of a lot of goods that are imported,” Tucker said. “So, it’s going to raise those expenses and kind of reduce the after-tax disposable income that people have.
“I saw one estimate that was around about 1% of people’s after-tax income getting reduced as a very quick, back-of-the-envelope estimate of the impact of the 25% across-the-board tariffs on Canada and Mexico — and that’s a pretty big hit,” he added. “And so, maybe this $5,000 would essentially offset that. I mean, $5,000 is a lot more than 1% of annual income for the vast majority of households in the country.
“Broadly, I do think there’s a bit of a risk that if the DOGE dividends happen, that would be a bit of an inflationary impulse to the economy as a whole.”
