Latest / Elon Musk Podcast / DOGE Cut 271,000 Jobs. Spending Still Went Up.

Transcript

DOGE Cut 271,000 Jobs. Spending Still Went Up. · Elon Musk Podcast

• 0:00
  Thanks to our amazing community members like you, we've reached
• 0:03
  the top 15 of Spotify's video podcast, the Top 10 audio
• 0:08
  podcast on both Apple and Spotify for the tech category,
• 0:12
  so you all make this possible. If you want to support us more,
• 0:15
  check out our Patreon. That's patreon.com/stage 0 News
• 0:19
  so we can keep this free and open for you to enjoy.
• 0:25
  Something interesting happened the other day.
• 0:27
  I was looking through our stats on Spotify and Apple Podcasts
• 0:31
  and I noticed that about 55% of you are not subscribed to the
• 0:37
  show. That means 45 cent of you are
• 0:38
  subscribed and I really do appreciate your support.
• 0:42
  Now the other 55 are awesome, but I'm doing a favor.
• 0:46
  Could you please hit the subscribe button?
• 0:48
  It'll take you one second. I'm going to promise you 10
• 0:50
  years of this podcast for free, no pay walls.
• 0:54
  I'm not going to charge you anything ever, but I'm going to
• 0:56
  give you 10 years of this show for free.
• 0:58
  I've already been doing it for five years, and I plan on doing
• 1:01
  it for 10 more. And the only way that we can
• 1:03
  continue doing this is with your support.
• 1:06
  So one second of your time to hit the subscribe button right
• 1:09
  now would help the show tremendously.
• 1:12
  Thank you so much. The Department of Government
• 1:15
  efficiency is gone. DOGE quietly disbanded in
• 1:19
  November, eight months ahead of schedule, and the final numbers
• 1:23
  are now in Elon Musk promised to cut at least $2 trillion in
• 1:29
  waste, fraud and abuse. That target dropped to about a
• 1:33
  trillion dollars, then 150 billion.
• 1:37
  The actual result, government spending went up, not down, up
• 1:42
  by about $250 billion compared to the same period last year.
• 1:46
  But there's another number that tells a different story.
• 1:49
  Doge cut 271,000 federal jobs in less than 10 months.
• 1:53
  That's the largest peacetime reduction in federal employment
• 1:56
  since World War 2. So what actually happened here?
• 2:00
  We're going to walk through the data of what Musk himself now
• 2:02
  says about the experiment and what are reveals about the
• 2:05
  limits of disrupting the government the way you might
• 2:08
  disrupt the company now. The Keto Institute, a
• 2:12
  libertarian think tank, published A detailed analysis
• 2:15
  this month. They looked at Treasury
• 2:17
  Department spending data and Bureau of Labor Statistics
• 2:20
  employment figures. The conclusion is very blunt to
• 2:23
  the point. DOGE reduced federal employment
• 2:26
  enormously, but it did not cut spending in.
• 2:29
  It could not possibly cut spending just by firing people.
• 2:35
  This cuts to a fundamental math problem that Musk either did not
• 2:38
  anticipate or chose to completely ignore.
• 2:41
  Federal salaries account for about 10% of total government
• 2:45
  outlays. The overwhelming majority of
• 2:48
  federal spending goes to transfer payments, things like
• 2:51
  Social Security, Medicare, Medicaid, and interest on the
• 2:56
  national debt. None of that changed because
• 2:59
  DOGE laid off workers at the Department of Education or the
• 3:03
  USAID. Let's get into that right after
• 3:06
  this break. And the employment numbers are
• 3:09
  crazy. Federal civilian employment fell
• 3:12
  from about 3.015 million in January to 2.744 million in
• 3:18
  November. 9% decline. The pace of reduction has not
• 3:22
  been seen since the military demobilizations at the end of
• 3:26
  World War 2 and the Korean War. So Alex Nowrista, senior vice
• 3:33
  president for policy at the Keto Institute, put it very bluntly,
• 3:39
  said this is a faster and steeper decline in federal
• 3:41
  employment at any time since the demobilization of the US
• 3:45
  military and economy at the end of World War 2, at the and at
• 3:49
  the end of the Korean War. It's the biggest peacetime ever
• 3:53
  decline in federal workers over a 10 month period.
• 3:57
  DOGE brought federal employment back to levels last seen in
• 4:00
  2014, and it did so in less than a year.
• 4:03
  Nearly 60% of that decline happened in one month, October,
• 4:09
  driven by a civil service buyout offer the Musk had initiated
• 4:13
  earlier in the year. The deferred resignation program
• 4:16
  gave workers the option to leave with pay through September if
• 4:19
  they agreed to just quit and depart voluntarily, and
• 4:24
  thousands took that deal. But here's the spending side.
• 4:29
  The federal government spent $7.6 trillion in the 1st 11
• 4:33
  months of 2025. That's approximately $248
• 4:37
  billion more than the same period in 2024.
• 4:41
  It also exceeds spending in 20/23/2022 and 2021 under
• 4:46
  President Biden. And according to the Cato
• 4:49
  analysis, there is no visible structural break in spending
• 4:52
  that coincides with Doge's start date.
• 4:56
  An observer who did not know when DOGE began could not
• 5:00
  identify it in the data. The trajectory of federal
• 5:04
  outlays continued almost exactly as the Congressional Budget
• 5:07
  Office had projected before DOGE existed.
• 5:11
  Doja's own website claims $206 billion in savings, but multiple
• 5:16
  outside sources and analysis have found those claims
• 5:19
  overstated, full of errors and difficult to verify.
• 5:23
  Actually, NPR reported that some listed contract cancellations
• 5:27
  were not actually cancelled, were worth far less than
• 5:30
  claimed, and had already been spent.
• 5:33
  One example, DOGE claimed $4.3 million in savings from
• 5:36
  canceling a $4.4 million FAA consulting contract.
• 5:42
  The contract was not terminated, was worth about $150,000, and
• 5:47
  almost all the money had already been spent.
• 5:49
  So Musk addressed this at a recent podcast interview with
• 5:53
  Katie Miller, a former DOGE spokeswoman.
• 5:55
  When asked if DOGE was the success, Musk said We were a
• 6:00
  little bit successful. We were somewhat successful.
• 6:04
  And when pressed on whether he would do it again, he said, I
• 6:06
  don't think so. Instead of doing Doge, I would
• 6:09
  have basically worked on my companies, he added, almost
• 6:12
  wistfully. They wouldn't have been burning
• 6:15
  the cars. Now that's a reference to test
• 6:17
  the vehicles being vandalized dealerships during the height of
• 6:20
  public backlash against Doge's cuts.
• 6:24
  Now, the timeline of Musk's involvement tells its own story
• 6:27
  here. He was sworn in as a special
• 6:29
  government employee, or SGE, in January, which legally limited
• 6:33
  his 10 year to 130 days. He left at the end of May, right
• 6:37
  on schedule, but his departure was not quiet.
• 6:41
  In an interview the day before he left, Musk called Trump's
• 6:44
  signature legislation the One Big Beautiful Bill, a massive
• 6:48
  spending bill that increases the budget deficit and undermines
• 6:51
  the work that the Doge team is doing.
• 6:54
  Within days, Musk was on X calling the bill.
• 6:57
  It is gusting abomination. He urged supporters to kill the
• 7:00
  bill and threatened to fire every politician who voted for
• 7:03
  it. Trump responded by saying that
• 7:06
  Musk had lost his mind and that he was not interested in
• 7:09
  speaking to him. And the two feuded publicly
• 7:12
  through June and July, with Trump at one point telling a
• 7:15
  really crowd maybe it's time he went back to where he came from
• 7:20
  now. Musk even formed his own
• 7:21
  political party, the America Party, in response, but by
• 7:24
  September changed his mind. The two in reconciled publicly,
• 7:28
  preparing together at a memorial service for conservative
• 7:31
  activist Charlie Kirk. And the bill passed anyway.
• 7:34
  The Congressional Budget Office estimated it would add roughly
• 7:37
  $3.8 trillion to the deficit over the next decade.
• 7:41
  Indoge itself no longer exists as a centralized entity.
• 7:45
  When asked about his status in November, Office of Personnel
• 7:48
  Management Director Scott Cooper told Reuters that doesn't exist
• 7:53
  now. OPMOPM has absorbed many of
• 7:57
  Doge's functions. Some of Musk's former
• 7:59
  lieutenants transitioned to full time government roles at the
• 8:02
  agencies they were originally detailed to.
• 8:05
  Joe Gabia, an Airbnb Co founder who led Doge's overhaul of the
• 8:08
  federal retirement system, now runs something called the
• 8:11
  National Design Studio, responsible for government
• 8:14
  websites, including the new Trump accounts program.
• 8:18
  Now what does this all mean? Though the Cato analysis frames
• 8:21
  it quite plainly, Doge failed to cut spending because most
• 8:25
  federal spending is for entitlement programs that remain
• 8:28
  on policy autopilot. Only Congress has the authority
• 8:32
  to change those programs. Firing bureaucrats does not
• 8:36
  touch Social Security. Canceling grants does not touch
• 8:40
  Medicare. The math never worked out.
• 8:42
  A 10% cut in the federal workforce saves roughly $40
• 8:46
  billion annually. That's a lot of money in
• 8:48
  absolute terms, but but it's a rough rounding error in a $7
• 8:53
  trillion budget. DOGE reduce federal employment
• 8:57
  enormously. It did not cut spending, and it
• 9:00
  couldn't possibly cut spending just by firing people.
• 9:03
  The only likelihood to close the deficit is by cutting the
• 9:06
  biggest programs and the biggest programs, Medicare, Social
• 9:10
  Security, Medicaid, and also the military.
• 9:14
  They're not going to cut military spending.
• 9:16
  Some agencies did not see spending cuts USAID saw.
• 9:22
  The biggest, though, was spent over $30 billion in 2024, was
• 9:26
  slashed and folded into the State Department before
• 9:29
  November. The Department of Education is
• 9:31
  on pace to spend over $40 billion less in 2025, and the
• 9:36
  FCC is on track to spend about 1/3 of as much this year as last
• 9:41
  year, with those savings were dwarfed by increases elsewhere.
• 9:47
  Defense spending is up. Homeland Security is up.
• 9:50
  Commerce is up. In the mandatory spending
• 9:52
  categories, the one that's actually drive the budget kept
• 9:55
  growing on autopilot. Social Security payments alone
• 9:59
  are set to be over $100 billion higher in 2025.
• 10:04
  Interest payments of the national debt will also be about
• 10:07
  $100 billion higher. The national debt grew by more
• 10:10
  than $2 trillion during Trump's first year back in office.
• 10:14
  Musk came to Washington with the same playbook he uses at his
• 10:17
  companies Move really fast, cut aggressively.
• 10:21
  Ignore resistance. And that works at a private
• 10:24
  enterprise where you own the equity and can fire anyone who
• 10:27
  disagrees with you, and does not work in a government constrained
• 10:30
  by laws, courts, civil service protections, congressional
• 10:34
  appropriations and public opinion.
• 10:36
  Musk acknowledged as much in his interview with Miller, said he
• 10:39
  had underestimated how hard it would be to remake the federal
• 10:42
  government quickly, and he noted that his businesses had suffered
• 10:46
  because of the time and controversy that Doge consumed.
• 10:50
  Now the irony is that Musk's political involvement may have
• 10:53
  cost him more than he saved anyone.
• 10:55
  Tesla's brand took a beating. Sales slowed.
• 10:58
  Cars were vandalized, caught on fire.
• 11:00
  Dealerships were fire bombed. Investors pressured him to
• 11:03
  refocus on the company. Meanwhile, government spending
• 11:06
  rose. The deficit crew in the national
• 11:08
  debt crossed $38 trillion. DOGE cut jobs but not costs and
• 11:14
  made headlines. But it didn't make any savings.
• 11:16
  And in the end, even the man who ran it said he would not do it
• 11:20
  again. There's a broader lesson here
• 11:22
  about the difference between running a company and running a
• 11:25
  government. In a company, the CEO has
• 11:27
  authority that can fire people, cancel projects and redirect
• 11:30
  resources at will. In government, power is
• 11:34
  distributed. Courts can block actions.
• 11:36
  Congress controls appropriations.
• 11:38
  Civil service rules protect workers.
• 11:41
  Public opinion shapes what is politically possible.
• 11:44
  And Musk ran into all of these constraints and seemed genuinely
• 11:47
  surprised by them. The same tactics that made him
• 11:50
  successful at Tesla and SpaceX, moving fast, breaking things,
• 11:54
  ignoring objections, generated lawsuits, political backlash,
• 11:57
  and ultimately limited results when applied to the federal
• 12:01
  bureaucracy. Now the agencies that Doge cut
• 12:05
  are now rehiring workers. Some employees who took the
• 12:08
  buyout have been asked to return.
• 12:10
  Operations stalled out. Patient basic functions broke
• 12:14
  down. The Labor Department, the Social
• 12:16
  Security Administration and other offices struggled to serve
• 12:19
  the public after losing experienced high value staff.
• 12:25
  Whether those service disruptions were worth the
• 12:27
  political statement is a question.
• 12:29
  Depends on your politics, but from a pure spending
• 12:32
  perspective, the answer is very clear.
• 12:34
  The cuts did not produce savings, the deficit kept
• 12:38
  growing, and the experiment ended 8 months early, quietly
• 12:42
  absorbed into the Office of Personnel Management as if it
• 12:46
  never. Hey, thank you so much for
• 12:47
  listening today. I really do appreciate your
• 12:50
  support. If you could take a second and
• 12:51
  hit the subscribe or the follow button on whatever podcast
• 12:54
  passing on right now, I greatly appreciate it.
• 12:57
  It helps out the show tremendously and you'll nip and
• 13:00
  each episode is about 10 minutes to get you caught up quickly.
• 13:04
  And please, if you support the show, evenmore.com/stage Zero
• 13:10
  and please take care of yourselves and each other and
• 13:12
  I'll see you tomorrow.