Trump, Musk Float idea of ​​$ 5,000 ‘Doge Dividend’ checks. Here’s what experts say

As the so-caalled Department of Government EfficiencyLooks to cut federal spending, Elon musk And President Donald Trump Have floated the idea that some of any savings should come back to Americans in the form of $ 5,000 Dividend Checks,

But experts say it’s too only only to say behther such checks should be materialize – and caution that if they did, there could be economic consequences for Consures.

Both musk and trump boosted a proposal that james fishback, ceo of investment firm azoria, posted Feb. 18 on social media platform x, That suggested sending Millions of American Households Checks.

“Americans sent their hard-earned tax dollars to washington, DC,” Fishback Told CNBC.com. He said he believes some of “that tax dollars was wasted.”

“There needs to be restartation to correct that,” Fishback Said.

The white house released in early February a List of what it called “waste and abuse” of funds at the US Agency for International Development, Including $ 1.5 Million to Promote Diversity, Equity and Inclusion in Serbia’s Workplaces and $ 70,000 for a dei musical in Iland.

Under Trump, DOGE, an Advisory Group, Set an aim to cut $ 2 trillion in federal speeding. However, Musk said in a recent interview That target may be the “best-case outcome” and there may be a “good shot” of cutting half that Amount.

In his proposal, fishback starts from the presumption that dog will achieve $ 2 trillion in cuts to the government. By Taking 20% ​​of that Total Savings-or Around $ 400 Billion-That May Leave Room for Around 79 Million Tax-Paying Househlds to Each Receive a $ 5,000 tax refund, Per FishbackkkkkkkkkkkkkkkkkkkkkkkkK”s Plan.

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The idea of ​​direct money may sound Familiarar to American Households, Millions of Whom Received Covid-ke stimulus checksBut these payments would be different from the stimulus checks, which work to stimulate the economy at a time of weak gross domestic production product growth, fishback said,Unlike the stimulus checks, the dog dividend checks would be only for households that pay federal income taxes, fishback said.

The idea calls for a dividend closer to someone the alaska period Federal Budget.

The rebate would be sent only to households that are “Net payers of federal income tax. Adjusted Gross Income of Under $ 40,000 effectively pay no federal income tax.

Fishback, meanwhile, told cnbc.com there’s no meinium income requirement, but Americans would have to file a federal tax return to receive the money. The principal of the payments may provide an innocent for nonworking individuals to rener the labor force, according to the plan.

To be sure, the terms of the plan could change if lawmakers decide to consider it.

Trump has welcomed the ideaMusk, who trump brieft on board to implement dog, “very much agrees the incentives are in place” The Billionaire.

Yet to send the dog checks out, the Trump Administration will need Congress’ approval. Fishback has been meeting with house and senate members to promote the idea.

Last week, house speaker mike johnson, r-la., said That while it would be “great” politically, other priorities should come first. Experts say Doge Needs to Figure out how much money have been saved before promising people checks in the mail.

“We have a $ 36 trillion federal debt. We have a giant deficit,” Johnson said. “I think we need to pay down the credit card.”

White House Deputy Chief of Staff Stephen Miller recently said The dog checks will be “worked on through the reconciliation process with Congress that’s going underway right now.”

Yet some experts have expressed doubts about the proposal.

“There’s no approves for this,” said elaine kamarck, a Senior Fellow at the Brookings Institute Who Ran the Clinton Administration’s National Performance ReviewWho implemented cuts in an effort to modernize and improve the federal government’s performance.

“You cannot spend money without congress telling you that you can spend money,” kamarck said. “That is illegal.”

It also remains to be seen whether the dog initiated can Generate enough Savings to Justify $ 5,000 Payments, Kamarck Said. Even with the Savings dog plans hope to generate, initiatives like curbing immigration will require new or Increased Spending in other areas.

Without yet having generated meaningful savings, it’s premature to talk about Dividend Checks, Macguineas Said.

“The bottom line is when you’re running $ 2 trillion deficits every year, you can’t give away more money in stimulus checks,” Macguineas said.

“Basically, you’re borrowing more to give back to people, but the borrowing still falls on Them,” macguineas said.

But if dog was able to generate $ 1 trillion in Savings per year, “Absolutely additional savings being returned to Taxpayers would make make Total Sense and Be Desirible,” SAID SAID.

Inflation spiked in the aftermath of the covid pandemic and is Still Higher Than the federal reserve’s 2% target. Some experts worry that additional direct payments to Americans would contribute to More inflation,

“This is certainly the wrong time to have any sort of consumer stimulus,” said Judge Glock, Director of Research and Senior Fellow at the Manhattan Institute. “Inflation remains elevated; any sort of stimulus would exacerbate that inflation.”

However, the Amount of Money Saved Under Doge May Not Provide Payments Big Enough to Fuel Inflation, Kamarck Said.

The project of direct payments come as Congress may look at extending provisions in the tax cuts and jobs act late this year.

There are already a number of policies with added to that package that are raising deficit concerns, said Alex Muresianu, Senior Policy Analyst at the Tax Foundation.

“This would be another very large thing to try and squeeze in as well,” He said.

Meanwhile, Fishback Mantains The Doge Dividend Checks would simply refund Americans money they they alredy contributed through income taxes.

Moreover, The Way Americans Bold Likely Use An Unexpected $ 5,000-by paying off debt, saving or investment towed long-term goals like retirement-Delhi not be inflationary, fishback said, citing a 2019 CNBC Surveyy,

“Every American has the mechanism with Doge and the incentive with the dog dividend to report this waste, fraud and abuse,” Fishback Said. “We’ll save even more of our hard-earned tax dollars when we give everything in the game.”