Fiscal conservatives are slamming Elon Musk’s DOGE budget cuts, calling them nothing more than “budget dust.” Critics insist “the savings aren’t large” and that the deficit crisis remains unresolved. Meanwhile, Congress continues its tax cut plans, leaving many questioning if the spending overhaul is just a political illusion.
Elon Musk’s U.S. Department of Government Efficiency, which was approved by Donald Trump, is attempting to reduce federal spending. Two conservatives have voiced their disappointment with this initiative.
The tech tycoon has pledged to drastically reduce the federal budget by dismantling entire government agencies and firing a large number of employees. However, according to Jessica Riedl of the Manhattan Institute and David French of the New York Times, these savings won’t be enough to compensate for the tax cuts that Republicans are planning.
Riedl predicted that rising interest and inflation rates would be the immediate result of excessive borrowing.
Inflation, which was projected to be slightly higher following the epidemic, was further exacerbated in 2021 by Joe Biden’s American Rescue Plan. Inflation as a whole was raised by around three points due to that strategy. Additionally, that causes interest rates to rise.
“In the long term, it’s even worse,” she chimed in. “With our debt reaching levels higher than we’ve ever seen in the developed world, you will eventually get to the point where Washington can’t even borrow enough money to pay for its spending.”
When that happens, the government will have little choice but to resort to printing, which in turn causes a cascade of difficulties. Before the train reaches that point, the authorities would need to halt it.
DOGE asserted that $55 billion had been saved, but according to Riedl, the actual figure was closer to $2 billion at most, The Raw Story reports.
Even if $2 billion were to materialize, according to Riedl, it would be logistically impossible for DOGE to seize and unilaterally cut federal spending. Unless Congress takes action to lower spending levels, any reductions in spending would legally have to be reallocated to other areas.
“So right now I would say DOGE has saved $2 billion, which, to put it in context, is one-thirty-fifth of 1 percent of the federal budget, otherwise known as budget dust.”
Last week, the House of Representatives, which is controlled by Republicans, narrowly approved a budget resolution that would slash taxes by $4.5 trillion over a decade. To balance this out, they plan to cut some government programs.
“They’re also indicating they’ll offset this with cuts to Medicaid, SNAP and other nutrition spending, and likely student loans,” according to Riedl.
Going on to say that she has her doubts about Congress’s ability to pass this. Over a decade, the price tag will be $4.5 trillion if they fail to do so.
Additionally, the budget anticipates long-term savings from discretionary spending, but neither the enforcement nor the seriousness of this commitment is addressed. Increases in both GDP and tax income are hugely anticipated in the budget. That is merely a marketing tactic. That won’t transpire.
French was baffled.
“It’s been a while since I’ve had a math class, but it sounds like what you’re saying is they’re cutting $2 billion for savings but they’re adding $4.5 billion in deficit,” French explained.
Adding that the sums of $2 billion and $4.5 billion are drastically different.
According to Riedl, the savings that would result from Musk’s planned dismantling of the government personnel would be insignificant.
“There are 2.3 million civilian employees,” she said. “If we eliminated one quarter of them — which would be remarkable, that would be laying off nearly 600,000 workers and not replacing them — you would save 1 percent of federal spending. The savings aren’t large.”
Luis Gochoco is a seasoned managing editor and writer with over a decade of experience covering politics, technology, gaming, and entertainment news. With a keen eye for breaking stories and in-depth analysis, he has established himself as a trusted voice in digital journalism. Luis is one of the key forces behind the success of GameNGuide, contributing to 12 million views through engaging and high-traffic content. He also played a pivotal role in generating 8 million views on International Business Times, shaping the platform’s technology and gaming coverage.
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