Would DOGE Stimulus Checks Help Americans?

American households could receive stimulus checks derived from cuts imposed by DOGE. In fact, there has been talk of DOGE checks from Department of Government Efficiency Chairman Elon Musk himself. But would the free money really help Americans?

The idea seems plausible. After all, Trump literally put his name on the COVID stimulus, pushing to ensure his signature would appear on each check so that Americans would associate him with the free money. He has mentioned the idea of DOGE checks as well, teasing the possibility further.

The idea of handing out $5,000 checks to Americans under the banner of “DOGE Dividends” has an undeniable basic appeal. Proponents argue these payments, funded by an alleged $2 trillion in budget cuts, will reward taxpayers without stoking inflation. But history, data, and the mechanics of federal finance suggest this plan could expand the money supply and intensify already-high inflationary pressures.

In 2020, the COVID stimulus expanded the money supply in epic fashion, leading to drastic price increases. After the CARES Act delivered $1,200 checks to most adults, followed by $600 and $1,400 rounds in later packages, the dollar was devalued drastically. That $1,200 felt substantial then, but the Consumer Price Index (CPI) has climbed about 25% from 2020 to March 2025, based on official numbers. 

Adjusted for inflation, $1,200 in 2020 dollars equals roughly $1,500 today. The proposed $5,000 DOGE checks are 3.3 times that amount—but hardly a jump from the COVID stimulus when you consider the resulting devaluation. Essentials like food, energy, and housing keep rising, and a new round of checks will make those issues even worse.

M2 10-Year Chart, FRED

The Federal Reserve Bank of St. Louis estimated that the $1,200 checks and related spending contributed 2.6 percentage points to the 9.1% inflation peak in June 2022. With supply chains snarled and production slowed, $5 trillion in total relief—much of it borrowed—flooded the economy, spiking demand when supply couldn’t keep up. Inflation has lingered above the Fed’s 2% target this year. The DOGE plan, at $400 billion (assuming 79 million taxpaying households receive it), is smaller, but it lands in an economy already wrestling with price pressures and stagnant growth.

The pitch is that DOGE’s $2 trillion in savings will cover the checks without new debt or money printing. But that’s a stretch. The federal budget exceeds $6 trillion annually, and revenues — around $4.5 trillion — leave a deficit gap. The Treasury doesn’t sit on a cash hoard from “efficiency” cuts; it funds spending with taxes, borrowing, and Fed money printing. DOGE’s $2 trillion target, as Elon Musk has noted, is a decade-long “best-case” goal, with $1 trillion more realistic. 

The House Budget Committee’s reconciliation plan aligns with this, aiming for $2 trillion over ten years. Even if achieved, $400 billion in checks requires immediate cash—likely from borrowing or monetary expansion. M2, still elevated from years of brazen stimulus, would swell further. Meanwhile, even the Fed itself has been forced to acknowledge the inflationary genie is not under control.

Housing costs are up 5% year-over-year and food prices rising 3%, per BLS data, with some foods skyrocketing even more — eggs are up over 50% compared to this time last year and the USDA predicts they could rise at least 40% higher in 2025. But housing costs aren’t up because your house magically became 5% more valuable; it’s because the measuring stick has been tampered with by monetary policy, and the dollar isn’t worth as much. Printing even more free money isn’t the solution, whether it comes from Treasury stimulus or artificially-low interest rates.

Gold remains a reliable inflation signal because of how it holds its real value over time, surpassing an all-time high of $2,900 an ounce for a true barometer of dollar weakness. Injecting $400 billion could boost spending on cars, appliances, or debt repayment, pushing prices higher even as Americans become increasingly overly-indebted.

CPI 10-Year, Bureau of Labor Statistics

Advocates like James Fishback argue the checks would target “net taxpayers” who save more, claiming this would temper any price increases or inflationary pressure. Data from the COVID era undercuts this. The Bureau of Economic Analysis found lower-income households spent 80% of their 2020 checks, while higher earners saved half. With DOGE checks, even if some save, millions will spend, adding demand to an overstretched system. The Congressional Budget Office projects federal spending will hit $6.5 trillion in 2025, with deficits near $2 trillion. Congress rarely cuts without offsetting elsewhere—$400 billion in checks could easily become a net addition, not a reallocation.

The math isn’t reassuring, either. If DOGE saves $200 billion annually, that’s half the checks’ cost in year one. Borrowing or Fed bond purchases would likely bridge the gap, growing M2. Historical precedent supports this: the 2020 deficit jumped 47% to $3.1 trillion, per Treasury data, driven by stimulus. Gold rose 25% that year, from $1,500 to $1,900. Today’s $2,900 gold price suggests markets expect more of the same.

Gold Price, 1-Year Chart

On the surface, it might seem like $5,000 checks could temporarily ease burdens for some. But the broader impact is a devalued dollar and a hefty dose of gasoline on the inflationary fire, making things much worse for Americans in the medium and long-term. Inflation hurts savers and fixed-income folks most, and prices are already climbing. The COVID stimulus showed how fast things spiral: M2 ballooned in 2020-2021, and inflation followed. DOGE’s $400 billion, even if “cut-funded,” risks a repeat in a zombie economy where stagflation looms.

DOGE checks would make prices higher, but the primary cause of higher prices is inflation caused by the Fed. With no real tools in its box other than money printing, they are likely to embark on more inflationary policy this year as it gets harder and harder to deny that we’re in a recession. As Peter Schiff recently posted on X:

The government will soon officially acknowledge the recession we’ve been in for years, but which was covered up by fake data. Voters weren’t fooled, which is why they elected Trump. But the media narrative will blame the recession and the rise of inflation on tariffs and DOGE.

— Peter Schiff (@PeterSchiff) March 9, 2025

This isn’t about denying relief—it’s about reality. $400 billion doesn’t materialize from thin air. With gold flashing warnings and prices rising, DOGE checks would be a dollar-devaluing disaster. With the Fed always itching to turn on the money printer, DOGE would be an easy scapegoat for inflation even without the stimulus checks. But another free money bonanza would make the price increases resulting from central bank monetary policy even worse.