Elon Musk's Department of Government Efficiency (DOGE), launched under President Donald Trump, claims to be slashing U.S. federal spending by eliminating fraud, cutting wasteful contracts, and shutting down entire agencies. Musk has promised $2 trillion in annual savings, yet government spending has remained virtually unchanged since Trump took office.
Despite DOGE’s high-profile cuts—including the closure of USAID and reductions in diversity and inclusion programs—official Treasury data contradicts Musk’s claims, showing that federal spending has actually increased slightly, averaging $30 billion per day, up from $26 billion under Biden.
One major challenge is that only about 10% of the budget is realistically within DOGE’s control. The majority of federal expenditures (about two-thirds) are mandatory spending on Social Security, Medicare, and Medicaid, while another 10% is allocated to interest on national debt. Even if Musk eliminated all government fraud—estimated at $233 billion to $521 billion annually—he would still fall far short of his savings target.
The most tangible effect of DOGE so far has been mass government layoffs, leaving thousands of employees uncertain about their futures. While this may appeal to Musk's and Trump's anti-bureaucracy stance, it has yet to translate into real fiscal savings.
So, what are the economic consequences of the Trump/Musk DOGE initiative?
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