You can’t drastically reduce government spending without hurting people (View Highlight)
Elon Musk is distancing himself from the Trump administration, officially leaving his part-time job as shadow president and claiming he’ll reduce his spending on politics going forward. This is a guy who often says things that aren’t true, so I wouldn’t take any of that as ironclad. But his remarks seem to be genuinely indicative of a desire to spend more time on the substance of SpaceX and on an attempt to rehabilitate Tesla’s reputation in a world where Republicans still don’t want to buy electric cars. (View Highlight)
One take is that DOGE basically failed. Government spending has not been significantly cut. The new GOP tax bill relies on accounting gimmicks, trillions in new debt, and unpopular cuts to Medicaid and nutrition assistance rather than any major efficiencies. (View Highlight)
Another is that this failure narrative is naive, that DOGE was never really about spending money, but about bringing the bureaucracy to heel. That the DOGE firings and contract cancellations are very real, and that Trump and Musk have had a real impact through their actions. (View Highlight)
Republicans are now moving a budget package that involves trillions of dollars in new debt, plus huge cuts to Medicaid and food assistance. They are trying to convince the electorate that this can be pulled off without harming any worthy recipients, which is just a replay of the notion that DOGE would magically locate incredible savings. And the fact that we just saw that these guys are full of shit is directly relevant to the most important debate playing out right now. (View Highlight)
Back in February, for example, Musk went on a tweeting binge about how the Social Security Administration’s official records listed millions of clearly dead people as still alive. He kept arguing that this demonstrated the existence of a huge quantity of bogus payments, and it became a headline example of the kind of good that DOGE was going to accomplish. Not only did Musk make this claim, Trump discussed this issue extensively in his speech to a joint session of Congress. According to Republicans, this is a marquee example of how applying private sector rigor to government will allow them to drastically cut spending while protecting benefits for legitimate claimants. (View Highlight)
All the lame reporters for the mainstream media tediously explained that this had actually been looked into repeatedly by the lame bureaucrats at the GAO and that none of these people are actually collecting Social Security benefits. (View Highlight)
Now, my take was that it was good to draw attention to the fact that the Social Security Administration was being stubborn about not simply deleting these people from their records. The bureaucracy does not, in fact, allow huge sums of money to be paid out in benefits to dead people. But I do think the bureaucracy tends to become excessively siloed and inconsiderate about the impact of their actions on other aspects of the bureaucracy. The SSA viewpoint is that since nobody is collecting benefits from these numbers, there’s no problem. But leaving bogus numbers lying around creates opportunities for other kinds of fraud, and the practice should be changed. And last week DOGE did, in fact, get the SSA to update the file. (View Highlight)
But, again, Musk and Trump leaped to a wildly inaccurate conclusion about this work. They made a lot of claims to the public that were wrong. And then when their claims turned out to be wrong, they just stopped talking about it rather than admitting to any kind of error or lessons learned. That’s exceptionally bad epistemic practice, but we can do better than them. The correct update to make here is that while there are plenty of public sector practices that one can reasonably criticize, it is extremely difficult to identity true fiscal free lunches, where large sums of money can be saved without tackling some kind of politically powerful or sympathetic constituency. (View Highlight)
More broadly, during the campaign, Musk said he could eliminate 2trillioninwasteandfraud.Aftertheelection,he[cutthatestimateto1 trillion](https://www.reuters.com/world/us/musk-acknowledges-2-trillion-spending-cut-goal-long-shot-2025-01-09/). It seems like he actually ended up cutting between 60billionand160 billion. Clearly, part of the game here is to get me to write that sentence down so that right-wingers can dunk on me and say, “How out of touch do you have to be to think that 60billionisasmallnumber?”Well,fairenough.Butif60 billion is a big number, Musk overestimated the amount of fraud by at least $840 billion — a much larger number. When your estimate is hundreds of billions of dollars off the mark, you’ve made a significant mistake, and that’s on you. (View Highlight)
Republicans identified USAID as a program whose beneficiaries are politically weak (because they live in foreign countries) and where actual experts genuinely believe there is a good amount of waste. They then deleted the whole thing in a way that credible forecasters believe could lead to between 483,000 and 1.14 million excess deaths over one year. The body count is believed to be six figures already. I recognize that part of the game is that Republicans want to generate a lot of moralistic outrage about this from Democrats, at which point they can portray themselves as dedicated to an America First strategy, while liberals are obsessed with foreigners. So I won’t dwell on the moralistic outrage here (if you’re in the market for that, read Scott Alexander here and here), but just note that even if you believe this was the only harm of the DOGE cuts, that’s still a pretty bad track record. (View Highlight)
Part of what’s frustrating about this is that lots of participants in the DOGE effort seem to have been acting in good faith. (View Highlight)
Sahil Lavingia who has written about his time on the DOGE team at the Veterans Administration, for example, really did improve some of the software at the agency, and did so in a much lower-cost way than the government’s standard contracting model. People have been broadly aware that this overreliance on contractors is dysfunctional for a long time, but while we’ve had occasional waves of highly motivated outsiders (18F under Obama, DOGE under Trump) trying to improve things, we never achieved a systematic solution. The reason for that, as Lavingia explains, is that once you get the talented outsiders into the agencies, they discover that the agencies aren’t blundering, they’re following the law. If you want to do things better, you need to get Congress to come together around some reforms. This is what Jennifer Pahlka is always writing about, and it would be great if we had an administration that wanted to genuinely elevate reforms to the procurement and civil servicing hiring processes. (View Highlight)
One last note on harms: DOGE appears to be crippling the newest and most innovative parts of the National Science Foundation, because in their quest to maximize layoffs, they’re firing people on temporary status willy-nilly — “in the case of NSF, those are often the most highly-qualified people who took a pay cut to contribute to American science for a couple of years.” Not only is this insane, it is literally the situation of the DOGE team themselves. But they’re doing it anyway, because the story of DOGE, top to bottom, is carelessness toward everything outside of their extremely narrow politics. (View Highlight)
Speaking of narrow politics, cutting Medicaid on the scale that Trump wants to is very unpopular. (View Highlight)
But beyond that, it’s specifically dangerous to Trump’s political coalition, because a consequence of his success in increasing GOP support among downscale voters is that there are now a ton of Republicans on Medicaid. (View Highlight)
Medicaid covers 40 percent of childbirths in the United States and is crucial to maintaining the viability of rural health care systems. If you cut poor people’s health care in New York City, that of course means less business for the city’s health providers. But there are tons of people in NYC, and all the hospitals and other main pieces of infrastructure will survive. In rural areas, though, there are fewer customers overall and also fewer rich people. Hospitals will close, provider networks will consolidate, and even patients who don’t lose coverage will end up inconvenienced and subject to uncompetitive pricing. (View Highlight)
There’s a progressive bubble where everyone has hated Musk for years, where people are instinctively skeptical of rich businessmen, and where they trust the government and the establishment. But there’s a conservative bubble where all these dynamics are reversed. Where there was completely genuine and sincere enthusiasm for the DOGE exercise and a real belief what once Musk popped the hood, he would discover huge amounts of fraud that would make it possible to reduce the deficit without harming anyone. DOGE has succeeded in doing some things, but it has absolutely not succeeded in doing that. It fell short of its targets by hundreds of billions of dollars, not because Musk and his team are stupid or lazy, but because the fraud genuinely does not exist. (View Highlight)
