A 33 year old real estate agent and investor with over $120M in residential real estate sales. This is my way of sharing actionable ideas that will make you a smarter and wealthier investor.
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Here’s a scary chart. It’s the US Federal Reserve's assets and liabilities, which have been graphed every year for the past few decades. It shows how the US Government borrows money it doesn’t have.
Source: Board of Governors of the Federal Reserve System
If they need more funds for, say, an infrastructure bill or anything else, they can issue bonds to the US Federal Reserve, which will then transfer these funds to the US Government to be issued into circulation. This is formally called quantitative easing and is essentially an infinite money glitch.
That’s exactly why Trump and the DOGE (Department of Government Efficiency) want to scale back excessive government borrowing and reduce the liability on the Fed’s balance sheet. So, in this article, we’ll break down the significant changes he’s proposing, what it could all mean for you, and whether you will actually get a dividend for staying in the United States.
The Role of DOGE
Although the DOGE is not an official government agency, it is an advisory board tasked with identifying wasteful government spending. It has been just over a month, and the department has already reduced billions of dollars in government spending. So far, here’s what has been cut based on DOGE’s recommendations:
But what caught people’s attention was when a Twitter user suggested that some of these savings should be returned to taxpayers as dividends. Elon Musk agreed, and shortly after, Trump endorsed the idea. And now, here we are.
How Much Money Could You Receive?
First, let’s clear up a common misconception — you can’t divide the total savings by the U.S. population. That number includes children, non-taxpayers, and non-citizens who wouldn’t be eligible for any refund.
Instead, we need to look at the number of taxpayers who contributed. According to the Tax Foundation, about 77 million people (the top 50% of earners) pay nearly 98% of all U.S. income taxes. When including those who paid at least some taxes, that number is roughly 85 million people.
Now, Trump’s proposal suggests that 20% of DOGE savings could be returned to taxpayers. If $55 billion in spending is cut, $11 billion would be distributed among 85 million taxpayers. This would result in an initial payout of about $129 per person. But if savings continue at the same trajectory over an entire year, that payout could increase significantly — potentially reaching $1,550 per taxpayer. In the most optimistic scenario, where DOGE cuts $2 trillion over time, the payout could be over $5,000 per person.
However, unlike previous stimulus checks, where people earning below an income threshold were eligible for stimulus, this refund would likely work in reverse. The more you paid in taxes, the more you would get back. This makes sense because those contributing more to government revenue should be entitled to a larger refund. For example, if someone paid $10,000 in taxes, they would theoretically get a bigger refund than someone who only paid $1,000.
Economic Impact: Will This Fuel Inflation?
With inflation still being a major concern, some economists worry that injecting billions of dollars back into taxpayers’ pockets could drive prices even higher. The Federal Reserve recently indicated that rate cuts are unlikely in the near future due to persistent inflation risks.
Past research suggests that 42% of the inflation seen during COVID-19 was a direct result of stimulus checks injecting more money into the economy and driving up demand. However, this situation is slightly different. The inflationary effects could be minor since the money being returned is from existing tax revenue rather than new money being printed.
Some economists also argue that high-income taxpayers are more likely to save or invest their refunds rather than spend them, reducing inflationary pressure. However, others believe that most people — regardless of income level — would spend a windfall like this, leading to a mild uptick in inflation.
Source: US Inflation Calculator
Either way, this refund wouldn’t change the Fed’s stance on interest rates. With inflation still above 2%, it’s unlikely that we’ll see major rate cuts anytime soon unless a black swan event forces their hand.
Will You Actually Get a Check?
There’s a decent chance some version of this idea will happen within the next year or two, but don’t expect a check in the mail anytime soon. Any savings would first need to be audited, verified, and locked in before a refund program can be implemented.
It’s more likely that any savings would be used to offer tax credits in future years rather than issuing direct payments. This would make it easier for the government to balance the budget while allowing taxpayers to benefit from spending cuts.
My Thoughts
I’m a strong supporter of reducing government waste and eliminating unnecessary expenditures. There’s no reason why government departments should be failing audits, losing track of billions of dollars, or running bloated departments. It just seems like common sense that all government spending should be public and traceable down to the last penny or, I guess, down to the nickel.
Every dollar wasted is money that could have been returned to taxpayers or used more efficiently elsewhere. There's no accountability and no incentive for the government to spend any less money because they have become so accustomed to just pressing a button and printing more money that it doesn't matter. This applies to both Democrats and Republicans – neither side is perfect, and this has been going on for decades.
However, while cutting spending is important, slashing budgets too quickly without a clear plan can create unintended consequences. There’s always a risk that essential services could be underfunded or cuts could disproportionately impact some important programs.
At this point, everything is still just speculation, and while the idea sounds promising, it remains to be seen how much savings will be achieved — and how much of it will be returned to taxpayers. Until then, it’s worth keeping an eye on these developments and seeing how this proposal turns out in the months ahead.
That's it for this week. I hope you enjoyed this article. Let me know your thoughts by responding to this email - I read every single comment :)
Stay safe, stay invested and I will see you next week – Graham Stephan.
A 33 year old real estate agent and investor with over $120M in residential real estate sales. This is my way of sharing actionable ideas that will make you a smarter and wealthier investor.
