Elon Musk argues everything the government spends comes from taxes from your salary or inflation that raises prices.
Elon Musk recently revealed that all government expenditure is taxed. Taxpayers pay for income taxes and inflation.
This was in reaction to Dogecoin founder Billy Markus’ warning about the government overspending by $2 trillion yearly for eight years.
Elon acknowledged the true cost of Washington’s spending frenzy. The guy now speaks more than words. Elon and biotech investor Vivek Ramaswamy will lead the new Department of Government Efficiency (D.O.G.E) with Donald Trump in the Oval.
Elon’s ambition seems impossible when analyzing the U.S. budget. Start with $880 billion in national debt interest payments. Unless the government defaults, that 13% of the budget is untouchable.
Social Security, another political holy cow, consumes $1.46 trillion—22% of total spending—making cutbacks impossible. Add Medicare, the lifeline for elderly, and required spending consumes most of the federal budget.
The discretionary budget, which Congress may change annually, remains. That accounted for 25% of government spending in 2023 at $1.7 trillion. Over half of discretionary funding went to defense ($874 billion).
Educational, transportation, and Homeland Security projects received the remainder. Elon wants to save $2 trillion, but even cutting all discretionary expenditure wouldn’t do it. Imagine draining a pool with a teaspoon.
However, the eccentric billionaire will try. Last month, Trump predicted waste elimination might save “at least $2 trillion” during a New York rally. If agencies aren’t necessary, he’d eliminate them.
He may be thinking about the many government projects stifled by bureaucracy and incompetence, but economists discredit his calculations.
Trump’s pledges don’t match Elon’s plans. The president campaigned on lowering benefit taxes to make Social Security more generous, which would increase expenditures.
He wants to increase military spending to create a “iron dome missile defense shield,” which won’t save money. While Elon speaks about reduction, Trump’s plans imply otherwise.
This tug-of-war isn’t new for Washington. In 2022, Republicans seized over the House and began cutting expenditures. However, their party opposed even a $130 billion discretionary expenditure cut.
Slashing $2 trillion might split the GOP if tiny cutbacks cause infighting. Economists doubt Elon’s timeline. He has not stated whether he will make these cuts in one year or over time.
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