The Only Good Argument For a DOGE Dividend Is ...

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Both Elon Musk and Donald Trump have raised the possibility, although the $5000 figure is mainly aspirational at this point. They want Americans to feel a sense of participation in the process, and to have a real stake in its success. And let's face it -- giveaways are always popular, at least in the short run.

Of course, that's also the problem, and we should all have long enough memories to grasp it. Americans received three rounds of 'stimulus' checks during the COVID-19 pandemic, with the first intended as a buffer to the government-ordered shutdown of commerce in the US and the massive loss of jobs that resulted. The second came after a too-long debate as to whether the first was sufficient, and ended up passing weeks after the election it might have impacted otherwise. 

Congress didn't redirect that money from other spending, but instead printed cash instead, which Joe Biden did almost immediately after taking office a third time. Biden was determined to build popularity for his agenda by issuing a third tranche of stimulus in an economy where the issue was no longer demand but supply. Economists such as Larry Summers warned about more sugar-high, demand-side stimulus to an economy already showing warning signs about inflation, to no avail. Biden sent out the third and entirely unnecessary tranche of stimulus and created an inflationary wave not seen in the US for forty years.

Does everyone remember how popular that made Joe Biden? Anyone? Anyone? Bueller? Bueller?

Now consider the macroeconomic impact of yet another stimulus check in an economy that still has supply-side issues. This stimulus would be more than double any of the pandemic rounds of stimulus, and at $5000 might outstrip all of them put together in nominal dollars. The impact of that much cash entering the economy would be immediately inflationary, and it would have secondary longer-term inflationary effects to the extent that it interferes with deficit and debt reduction that would have otherwise taken place with those DOGE-liberated funds. 

Some have suggested that a DOGE payout would differ in form from the stimulus tranches. Congress had to have the Federal Reserve print money for the latter, the argument goes, while DOGE will find money that already exists for the 'dividend.' Even stipulating to that argument -- and I'm not sure that the trillions in the bureaucratic slush funds are truly 'real' in that sense -- the same impacts apply. One could argue that the slush funds entered the economy as well, so we're not talking about new cash entering the system, but there's a difference between capillaries and aortas in that sense. The slush funds got filtered through so many channels that its inflationary impact was somewhat muted, but stimulus checks are like mainlining meth directly into a vein.

In short, there's really no good reason to hand out DOGE dividends ... except this from Andrew Schulz and Charlemagne tha God. The public has proven skeptical about Musk and his DGE efforts to drain the swamp and reclaim its funding. If they can give taxpayers a piece of the action, it could make the project much more popular, they argue:

SCHULZ: "The worst thing for the Democrat Party right now would be if it actually works. The worst thing for the Democrat Party is if the debt does go down."

CHARLAMAGNE: "You're right, but honestly, the worst thing that could happen is Elon gives out them $5,000 stimulus checks."

SCHULZ: "Oh, it's over." 

CHARLAMAGNE: "He give out them $5,000 stimulus checks, it's gon' be bad for a while."

SCHULZ: "Imagine what people will feel when they go, 'By the way, this isn't us giving you money. This is us giving you your hard-earned money back. You deserve this.'"

At first blush, this still looks like a mirror of Biden's spike inflation to pwn the cons! strategy. And it could still end up backfiring, too, because that kind of stimulus -- whether or not it's called "stimulus" -- will produce a demand spike in an economy where supply-side expansion has not yet taken place. 

However, this gets to a real reason to run the risk. Right now, the Protection Racket Media and Democrats (pardon the redunancy) are in full Shrieking Hysteria Mode over the idea of accountability from bureaucrats and money spent. They are trotting out every Poster Child of Woe to make DOGE efforts at swamp-draining as unpopular as possible. And it may be having some effect; polls show some opposition to what Musk is doing, although Trump clearly isn't watching that data for the purpose of changing strategies. 

It will take years to wring the funding from The Swamp and to impose full accountability and responsiveness onto the federal bureaucracy. Even Musk can't right-size DC Inc within a few months. To see this project through to completion, taxpayers will have to support it, and to do that, they have to feel invested in it. Having Trump and Karoline Leavitt read off lists of absurd spending decisions uncovered by DOGE certainly helps counter the massive pro-deep-state propaganda, but it won't be enough for long enough for the mission to fully succeed. 

Perhaps the only way to get that long-term investment from the electorate is to treat them as actual investors and pay dividends to connect them to the mission. If that's what it takes, then the risk of inflation would be worth running to get DOGE across the finish line. Even so, though, the proper strategy would not be a one-time balloon dividend up front, but a series of smaller but still significant dividends across time. That would not only keep support and interest in place, the risk of inflation from unnecessary stimulus would run much lower as well -- and hopefully give Trump's supply-side tax and regulatory policies time to expand supply to meet the demand.