Stimulus Checks vs Guaranteed Income: Which Is Better in a Volatile Economy?

As the economy grows more unpredictable, Americans are once again asking: will there be another stimulus check or is it time for something more lasting?

Contents

Stimulus Checks: Short-Term Relief, Long-Term Uncertainty Universal Basic Income: Ongoing Payments, Ongoing Debate Weighing the Trade-Offs

While one-time payments offer short-term relief during crises, some experts said universal basic income (UBI) could provide long-term stability.

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With new proposals like the DOGE dividend and local UBI pilots gaining attention, the debate is heating up.

When it comes to stimulus checks versus guaranteed income, GOBanking Rates talked to the experts about which is better in a volatile economy — see what they had to say below.

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Stimulus Checks: Short-Term Relief, Long-Term Uncertainty

While there is no formal federal proposal for stimulus checks, President Trump and Elon Musk proposed a “DOGE dividend,” as reported by The Hill — which would provide one-time payments of up to $5,000 to households that pay more in income taxes than they get back.

The money would come from 20% of DOGE’s projected $2 trillion in savings to taxpayers. So far, the federal efficiency agency says it generated about $160 billion in savings. However, households, not individuals, would get the check. Congress hasn’t authorized issuing checks.

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April Taylor, financial coach, said stimulus spending can temporarily boost the economy by allowing households to pay overdue bills, complete essential home repairs and afford goods typically out of reach.

“Stimulus checks don’t stop economic bleeding, but it is a band-aid for much larger challenges,” Taylor said. “It’s a short-term plan for long-term issues. These checks are often in response to natural disasters or economic downturns that mirror a recession.”

Nevertheless, while helpful in emergencies, one-time stimulus checks fall short as a lasting solution.

“They do not create an economic stimulus because every dollar that is transferred to a recipient must first be taken from someplace else,” said Wayne Winegarden, economist at Pacific Research Institute. “Any positive impacts from the spending from the recipient is offset by decreased spending by the funder.”

Universal Basic Income: Ongoing Payments, Ongoing Debate

Interest in universal basic income (UBI) is growing, with several local pilot programs underway.

For example, Franklin County, Ohio, provides residents with no-strings-attached payments of up to $500 a month as part of a UBI program, as reported by The Columbus Dispatch. Similarly, Albuquerque, New Mexico, launched a basic income program funded by cannabis sales tax, offering $750 monthly payments to selected families, according to the city’s official website.

“Guaranteed income like universal basic income is the steady drumbeat to stimulus checks’ one-time bang,” said George Carrillo, former state health policy official in Oregon and currently leading the Hispanic Construction Council. “By providing regular unconditional payments, it offers consistent financial security, reducing income volatility and enabling better long-term planning.

“Unlike stimulus checks, which are reactive, guaranteed income is proactive, addressing systemic issues like poverty and inequality,” Carrillo explained. ‘It also fosters stability by giving people the freedom to invest in education, entrepreneurship or health without the constant fear of financial ruin. Its feasibility depends heavily on sustainable funding models to avoid inflationary risks.”

However, Tim Rosenberger, legal policy fellow at the Manhattan Institute, said while many assume a guaranteed income dramatically improves recipients’ lives, the actual impact is often more modest or uneven.

“Guaranteed income is just a dreadful idea for long-term stability and preventing panic,” Rosenberger said. “People will still panic and guaranteed income has a disastrous impact on productivity and social mobility.”

Weighing the Trade-Offs

Stimulus checks and universal basic income are both typically targeted toward specific income groups, though their designs and effects vary.

While stimulus has a more established research base, universal income remains politically divisive, with economists debating its impact on work incentives and long-term investment in people and productivity.

“Guaranteed income provides recurring income to lower-income individuals,” said Brandon Parsons, economist at Pepperdine Graziadio Business School. “The key difference is frequency.”

Parsons explained the frequency of payments shapes how people use them: one-time stimulus checks are often saved, while recurring income is more likely to be spent and treated as part of a household’s regular budget. This shift in mindset can create a stronger sense of long-term financial stability for recipients.

“Guaranteed income has other potential negatives, such as increasing inflation and reducing the incentives for people who receive it to work,” he added.

Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.

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