Musk's trillion-dollar cuts: A bold blueprint for government efficiency

President-elect Donald Trump announced that he will appoint "Department of Government Efficiency" (DOGE) led by Elon Musk (the creator of SpaceX and Tesla) and businessman Vivek Ramaswamy, a former rival in the Republican primaries. It is expected that Musk will serve in this quasi-department (formally an external advisory body to the White House) in a consultative role. This is to ensure he can continue managing major businesses like Tesla, SpaceX, xAI, and Neuralink, a company that produces brain-implantable chips. Trump announced new tasks for businessmen on X.

"Together, these two great Americans will pave the way for my administration to dismantle government bureaucracy, remove unnecessary regulations, cut wasteful spending, and restructure federal agencies," Trump wrote in a statement published on X.

Before the elections, Musk did not elaborate on how he would cut government spending. However, during one of the online meetings with voters, he admitted plainly that the proposed cuts would cause "temporary difficulties but ensure long-term prosperity." - We have a lot of government waste, it's a bit like being in a room full of targets where you can't miss. You shoot in any direction to hit - Musk said about his strategy for cuts. And he announced that he foresees a gradual review of government spending.

At the famous rally at Madison Square Garden, the head of Tesla and SpaceX convinced people that "all government spending is taxes." - Your money is being wasted, and the "Department of Government Efficiency" intends to fix it - he said. Earlier in the campaign, Musk assured that under the new president, he would manage to cut the U.S. federal budget by at least $2 trillion. Bloomberg reminds us that this exceeds the amount Congress spends annually on government agencies, including defence.

The agency calculates that last year the government spent over $6.75 trillion, of which more than $5.3 trillion went to social security, healthcare, defence, and veterans' benefits. And it notes that practice shows it is difficult to convince Congress to cut spending in these areas.

Elon Musk, however, seems adamant on this matter. At the end of October in Pennsylvania, Musk told voters that it's necessary to "drain the Washington swamp" because "there are so many of them." He borrowed this phrase from one of the audience (Donald Trump had also spoken about "draining the swamp" when he first ran for the presidency, and many other politicians before him said the same). Musk assured that sharp cuts are needed; otherwise, the country would be led to bankruptcy.

Bloomberg points out that the closest to Musk's plans would be the multi-year vision of Republican Senator Rand Paul, which would involve cutting expenditures by 6% annually for five years, until U.S. expenditures and revenues are balanced. In response to a comment from a user on X, who noted that Trump and Musk's plans would mean "serious upheavals in the economy" and "stock market crashes," after which there would be a "revival" toward a "healthier economy," the billionaire replied meaningfully - "sounds about right."

Earlier, as the "Financial Times" reminds us, Musk said that savings in the system would come from dismissing hundreds of thousands of employees who currently create "enormous bureaucracy." He also talked about eliminating regulations that, in his opinion, stifle innovation. Then, he announced identifying unsuccessful investments of predecessors.

In an interview with conservative and controversial journalist Tucker Carlson, Musk said that he also sees cuts in drastically reducing the number of government agencies, which are currently about 420. "There are so many of them, some people haven’t heard of. I think we should allow ourselves 99 agencies," Musk speculated.

The "Washington Post" points out that Musk hasn't clearly stated over what period he's planning to make these radical cuts. Experts generally assess the impact of fiscal decisions over 10 years. If the billionaire meant cutting $2 trillion within one year, it would mean a real reduction in government spending by about one-third. Such an idea is assessed as absurd and unworkable.

Brian Riedl, a senior fellow at the Manhattan Institute, a centre-right think tank told the "Washington Post" that "The idea that you can cut $2 trillion from wasteful and unnecessary federal programs is absolutely absurd."

In his opinion, we are dealing with a fantasy in which a businessman identified the problem solely in bureaucratic waste, but "that's simply not how it works." Another matter is Trump's expectations, who - based on experiences from his first term - might attempt to completely bypass Congress when deciding on expenditures. This would clearly signal a serious constitutional dispute in the USA.

The service theatlantic.com warns about the risk of oligarchization in the American version, which Trump's presidency could fuel. "Many of America's wealthiest have concluded that the opportunities provided by Trump outweigh any social condemnation that might follow (his taking office - ed.)" - it reads.

Although oligarchy is mainly associated with Russia and other Eastern autocracies, and in the USA, Trump allies himself with the most powerful businessmen who do not owe their fortunes to him, the essence of the power-business agreements remains the same. Its main goal will be the exchange of favours.

Theatlantic.com notes that "Trump's and Putin's oligarchs share one significant similarity. Billionaires behind technological giants, attracted to Trump, would like to protect their monopolies by providing essential services that make them indispensable to the government and the nation. [...] Putin’s oligarchy largely consists of (his - ed.) old KGB friends and childhood friends from St. Petersburg".

The differences that are supposed to make the American system safer are democratic control and the rule of law. "Unlike Putin, Trump allies with truly creative entrepreneurs. However, this does not make the American model better, just uniquely dangerous. Trump's transactional will be tied to people driven by greed," warns the service. It adds that never before in the USA has "the state been such a profitable centre of profit for private business."