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Why do many people think Elon Musk's D.O.G.E will fail?
Elon Musk and Vivek Ramaswamy said they could cut $2 trillion, but it's worth noting: D.O.G.E has no real power. This is a private advisory group that can only make proposals that Congress may or may not consider. In addition, the scale of federal spending and the politics around it, and D.O.G.E is shaping up to be Elon's most suspicious project to date. Let's analyze why the whole thing looks like a fiery rocket accident. Government spending is too large to cut The U.S. budget is dominated by mandatory spending, accounting for about three-quarters of the federal funds. This category is not debated in Congress annually. It includes Social Security, Medicare, Medicaid, and interest payments on federal debt. Last year, these costs alone amounted to $4.89 trillion. Social security costs $1.45 trillion. Medicare and Medicaid together are $1.49 trillion. These programs are not only large; they're untouchable. Trump himself promised to protect Social Security and Medicare. That makes Medicaid a potential target, but cutting it is not as simple as cutting numbers on a spreadsheet. According to the CBO, 56% of Medicaid benefits in 2024 will go to the elderly, blind, and disabled. Many nursing homes rely heavily on Medicaid payments to sustain operations. Any efforts to cut benefits are politically risky. And if we're honest, nobody in Washington wants to explain why grandma can't afford her nursing home bills anymore. Paying interest is another black hole for cash. The US government spent $950 billion last year just to pay interest on its $33 trillion debt, a number almost equal to the entire defense budget. With rising interest rates, this cost is expected to double over the next decade. D.O.G.E can't just wave a hand and fix that. Spending indiscriminately will not salvage the situation. So, what else is there to cut? Spend as you wish. This is the amount of money that the National Assembly votes for annually and is divided into two types: defense and non-defense programs. Last year, defense spending reached 850 billion dollars. This money funds everything, from buying aircraft carriers to supporting 1.4 million active-duty military personnel. Good luck in persuading the National Assembly to reduce defense spending in an era of increasing global tensions. Discretionary spending unrelated to defense includes everything else: NASA, housing programs, education grants, farm subsidies—you name it. This category totaled $950 billion last year. Critics often target these programs when calling for budget cuts. But the point is. All discretionary expenditures combined represent only 14% of the total budget. Even if the D.O.G.E. eliminated every non-defense related program, it would not be able to cut $2 trillion. Federal employees are another target. According to the White House Office of Management and Budget, federal employee salaries and benefits cost $384 billion last year. There are about 2.3 million civilian employees working for the executive branch, not counting postal workers. One-fifth of them work for the Department of Veterans Affairs. Add to this military personnel, the total salary fund amounted to $ 584 billion. The job cuts sound great until you realize that it's only just touching the surface of the deficit. Debt is a real issue Let's talk about the elephant in the room: debt. The federal revenue, or the amount of money the government collected from taxes last year, was 4.92 trillion dollars. This figure is less than 1.83 trillion dollars compared to the government's spending. This gap (budget deficit) accounts for 6.4% of the U.S. GDP. And this is not a new problem. During the pandemic, the deficit-to-GDP ratio has reached 15%. Traditionally, deficits of this magnitude have only occurred during crises such as World War II or major recessions. The federal government borrows money to cover these deficits. Over time, that borrowing grows. Currently, the United States is facing a total debt of 33 trillion dollars. CBO forecasts mandatory spending to increase by over 2 trillion dollars in the next decade, while interest payments will double. These trends make D.O.G.E almost unable to implement meaningful cuts if the underlying debt issue is not resolved. Elon and Vivek Ramaswamy are non-traditional leaders Then comes the question of leadership ability. Elon is a technology genius, but running an effective government program is a completely different matter. He is busy managing Tesla, SpaceX, Neuralink, and other projects. How much actual time can he devote to D.O.G.E? Meanwhile, Ramaswamy is known for his biotechnology and libertarian political platform. Neither has significant experience in managing federal budgets or the complexities of government programs. Critics argue that their success in the private sector does not necessarily translate to expertise in the public sector. The federal budget is a web of longstanding laws, obligations, and benefits. Public perception is very important. If people don't value D.O.G.E, neither will Congress. And so far, the reaction has been quite indifferent. Many see D.O.G.E as a frivolous project by Elon and Ramaswamy rather than a genuine effort to address the deficit. In the end, D.O.G.E will have to face a difficult battle on all fronts.