Are $5,000 "DOGE Dividends" Coming?

Is the next move for DOGE cutting $5,000 checks to American taxpayers?

Last week Elon Musk floated the idea of sending 20% of DOGE savings to American taxpayers in the form of a check, calling it "The Spoils of Battle."

President Trump said he "loves the idea," and his lead economist Kevin Hassett was out pitching it on cable.

Speaker Mike Johnson, of coursedismissed it, saying "Everybody loves a check but we have to pay down the credit card," adding -- hilariously -- "Fiscal responsibility is what we do."

So what is a DOGE Dividend?

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What is a Doge Dividend?

The idea is that 80% of the money saved by DOGE goes to paying down debt and reducing the deficit, but 20% goes out in the form of a check to every American taxpayer.

Depending how much DOGE can cut, that could be up to $5,000 per taxpayer. As in $2 trillion saved times 20% makes $400 billion. Divided by 80 million people who pay income tax.

Now, politically, it's a fantastic idea.

Because it can build overwhelming voter support for DOGE to the point RINO's and even moderate Dems have to join.

Given the GOP's razor-thin margin in Congress, this can RINO-proof DOGE.

More important, DOGE was created by executive order. Meaning it can be cancelled by the next Democrat to creep their way in to the Oval Office.

It takes Congress to make DOGE permanent.

The counter-argument, of course, is what Johnson claims to want: pay down debt. After all, $400 billion is a chunk of change that would reduce interest expenses by something like $13 billion a year.

Which is helpful, but weigh $13 billion a year against a shot at making hundreds of billions of DOGE cuts permanent.

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What Happens to Inflation?

The other question is what would a DOGE dividend do to inflation.

After all, memories are still fresh of the Covid stimmie checks and the Bidenflation it helped ignite.

So, first, a DOGE dividend isn't even close to the Covid spending orgy.

Between 2020 and 2023 $7 trillion in excess spending was dumped out -- dutifully financed by the Fed.

The stimmies were barely a tenth of that -- the other $6.2 trillion was under the radar, from bank bailouts to transgender operas in Peru to trillions for racist overpasses and unicorn farts.

Moreover, historically about 70% of stimmie checks are saved or people pay down debt.

Roughly 0% of government spending is saved.

In other words government spending is 3 times more inflationary than stimmies.

Put it together and a DOGE dividend has roughly sixty times less impact on inflation than Covid.

So maybe a half point of inflation. Total.

But that's where it gets fun.

Because remember every dollar of DOGE dividend cut 5 times more in government spending — it’s a 20% dividend. Government spending that's 3 times more inflationary than stimmies.

That means even with the dividend DOGE is massively deflationary — net deflation is about 14 times the size of the DOGE dividend.

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What’s Next

In an ideal world we don't need a dividend because 100% of voters understand government is corrupt and inefficient.

Alas, you cut government with the voters you have, dividend and all.

In politics, never let the perfect be the enemy of the good. The voters you want are not necessarily the voters who exist.

And the Congress you want is never the Congress you’ve got.

If a DOGE dividend is the price to RINO-proof DOGE and make it permanent, it could pay us back for generations of smaller government, lower inflation, and a defunded radical left.

You certainly wouldn’t want the dividend to be permanent, lest it morph into an economy-destroying Universal Basic Income.

But as a “Spoils of War” to get independent voters — and moderate politicians — on-side, it could pay us back many times over.

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