The first month of the Trump administration featured among other things a highly-publicized spectacle of Elon Musk and his DOGE team being unleashed on various parts of the federal bureaucracy and sparking sharp partisan exchanges, with Democrats raging about a “constitutional crisis” triggered by Trump crudely ignoring many of the finer legal points regarding appropriated funds, bureaucratic organization, and civil service oversight (and darkly hinting that Musk is secretly pilfering personal data and promoting chaos and corruption for his own personal gain). On the other hand, Republicans are positively giddy, crowing about how they are “winning so much” in disrupting the woke machinations of Deep State cash cows like USAID and that Musk and his tech-savvy DOGE team are the ones heroically ridding the federal government of waste, fraud, and abuse.
In spite of the political storm triggered by DOGE, it is an error for Republicans to suppose that DOGE can somehow make government more efficient with spending cuts; even Musk admitted that if you merely make some cuts and don’t delete an agency entirely, the agency with all its spending just sprouts back like a weed does from its roots. Even worse, mass firings of Inspector Generals reflect a perversely wrong-headed notion now common in Republican circles: that selecting the “right” executive personnel is somehow a substitute for a rule of law, instead of recognizing that Inspector Generals must remain on the beat as the cops who keep bureaucrats in line long after the limited attention of the DOGE team has wandered off elsewhere. Noxious weeds will only sprout back faster if the bureaucrats who happen to survive a DOGE blitzkrieg are then put on a toothless honor system. Bureaucracies lacking vigorous, ongoing external scrutiny and enforcement of well-defined regulations have no honor and no check on their natural inclination towards sloth, corruption, or lust for power.
In budgetary terms, being able to delete an entire federal agency and its function outright does count as a long-run win (something which Republican Presidents have not been able to achieve since Ronald Reagan abolished the Civil Aeronautics Board in 1985), even if the legality of doing so without congressional approval is questionable. But is DOGE really winning enough on this front to justify celebrations like Musk proudly wielding a “chainsaw for bureaucracy” at a CPAC conference, or is DOGE just a colorful sideshow, distracting Americans from much grimmer fiscal realities that Republicans and Democrats alike steadfastly refuse to confront?
Musk had originally set a goal for DOGE of cutting $2 trillion in annual spending from the federal budget, though lately he has said that $1 trillion in cuts is more realistic. While promised cuts of this magnitude seem impressive, they need to be put into context and even Musk’s updated promise taken with a grain of salt. When we look at the overall FY2024 budget, we find that total expenditures are $6.8 trillion and the deficit is $1.8 trillion. But how much of that $6.8 trillion is actually within reach of DOGE’s chainsaw? Are long-run annual cuts on the order of $1.0 trillion (itself a comparatively modest reduction which isn’t even enough to balance the budget) attainable—especially given the risk of weeds sprouting back again after a few years—by eliminating significant parts of the federal bureaucracy altogether? What precisely can DOGE use its chainsaw on?
As we examine that $6.8 trillion of spending in more detail, sadly we see that the prospects for DOGE achieving its goal look pretty bleak. To begin with, nearly $1.0 trillion in spending is constitutionally required by the 14th Amendment to pay interest on the debt and federal employee pension obligations; this category of spending is off-limits to any budget cutting and is being driven upwards by rises in interest rates. While Trump has been loudly demanding that the Federal Reserve now engineer reductions in interest rates, the dilemma is that such reductions require an inflationary bank credit expansion that causes boom and bust cycles and accelerates the decline of the dollar’s purchasing power, economic outcomes that only worsen future budget prospects. In any event, DOGE can’t do anything about these expenditures.
Trump has promised not to touch Social Security, Medicare, and various benefits for poor relief like Medicaid, refundable child care tax credits, food assistance, housing assistance, and Pell grants, which altogether account for $3.7 trillion in spending. At most, DOGE might find a hundred billion dollars or so in fraudulent benefit payments to cut, assuming that such fraud is occurring on the scale Musk has been claiming, which is by no means certain. However, mere fraud elimination is not going to cut the trillions upon trillions of dollars that are being legally paid to lawful recipients every year. The urgent issue with this category of spending isn’t the level of fraud that is occurring; rather, it is the highly popular but economically-destructive premise that provision of economic security is a collective moral imperative that can be safely undertaken by the state. If Republicans refuse to challenge the alleged ethics of welfare statism nor acknowledge the causal link between thrift-deterrence/savings-consumption and America’s deindustrialization, voters will never be persuaded to accept significant cuts in this spending category.
Spending on the military, including support for veterans, accounts for $1.3 trillion annually, which Trump isn’t so keen on cutting either. Whatever amounts DOGE and Defense Secretary Pete Hegseth can cut from existing Pentagon expenditures will merely be shifted to other defense projects and not used for overall spending cuts. While Trump could generate a meaningful peace dividend by scaling back American commitments to NATO and to Ukraine, his desire to disrupt international commerce, acquire more colonies, promote ethnic cleansing of Palestinian Arabs, and escalate tensions with China and Iran will likely move the Pentagon in the opposite direction, towards costly arms races and perhaps even a major war. This could trigger much greater military spending in the future, not cuts.
Everything else the federal government does accounts for a mere $0.8 trillion in expenditures—hardly a promising target for generating sizable cuts—though the political optics of cutting tiny DEI programs, tiny international grants for promoting transgenderism, etc. do play very well with many Americans. As heart-warming as it might be to see highly-paid and insufferably woke administrators being locked out of their palatial offices in Washington, DC by DOGE and suffering the indignity of the sort of abrupt lay-offs that lowly deplorables in the productive sector have frequently endured, it’s hard to find enough juicy targets in the budget where DOGE could possibly generate $1 trillion in cuts without violating the constraints Trump and other Republican politicians insist on for their own political survival. DOGE is essentially on a fool’s errand in pretending to make serious cuts, unless one assumes that the pretense and the distractions provided by Mr. Musk are themselves the main point of the DOGE exercise.
Contrary to Republican mythology, the critical fiscal issue with the federal government isn’t waste, fraud, and abuse on the part of federal bureaucrats; the critical fiscal issue is that the American people and their decaying industrial base can no longer afford the existing fiscal burdens of welfarism and imperialism, let alone the costly new things Trump wants to do like acquire more colonies, ethnically-cleanse Palestinians, and cut our markets off from foreign-made goods, not to mention the expense of the intensified rivalries and conflicts with other governments such fresh acts of aggression against foreigners are likely to spawn. It is the non-wasteful, non-fraudulent transfer payments and interest payments and the jingoistic overstretch of empire that are spurring federal spending towards unsustainable heights, and DOGE’s tilting at bureaucratic windmills isn’t stopping it.
DOGE can’t offset the political dynamic under the fiat dollar system that has been in place since 1971. Elected federal politicians obtain their offices by outbidding their rivals in promising ever greater benefits, bailouts, and spoils to their supporters, all funded by unrestricted fiat money creation funding debt monetization. In spite of DOGE, the vast bipartisan welfare-warfare state, powered by endless fiat money inflation, is set to continue its relentless expansion at the expense of America’s economic greatness and at the expense of the standard of living of its productive classes.
