Latest / Elon Musk Podcast / Elon's New Government Position Cuts $2 Trillion from U.S.

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Elon's New Government Position Cuts $2 Trillion from U.S. · Elon Musk Podcast

• 0:01
  Hey everybody. Welcome back to the Elon Musk
• 0:04
  Podcast. This is a show where we discuss
• 0:07
  the critical crossroads that shape SpaceX, Tesla X, The
• 0:11
  Boring Company, and Neurolink. I'm your host, Will Walden.
• 0:20
  So how does Elon Musk plan to cut $2 trillion from the federal
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  budget? Is it realistic or will it lead
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  to a collapse of our vital services in the United States of
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  America? And can his involvement with the
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  Trump administration really make it happen, or will conflicts of
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  interest get in the way? Now Elon Musk has flow to the
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  idea of trimming $2 trillion from the US federal government
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  spending during a speech at a Trump rally in New York City
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  last month. Now he has been appointed to Co
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  lead the newly established Department of Government
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  Efficiency, or DOGE, by president-elect Donald Trump.
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  This appointment gives Musk an opportunity to test his
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  ambitious claims, but it's unclear how feasible his
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  proposals are or what impact they might have on the
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  functioning of the US government now.
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  In the fiscal year of 2023, the US federal government spent
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  approximately $6.25 trillion, according to the US Treasury.
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  In Musk's goal of slashing, $2 trillion would amount to a
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  reduction of nearly 30% in federal spending now.
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  For context, mandatory expenditures such as Social
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  Security, Medicare and interest payments on national debt
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  constitute a significant portion of that budget, making them
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  difficult to cut without legal changes or risking severe
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  political backlash. Now, interest payments alone
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  accounted for about $880 billion at 13% of the total, while
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  Social Security made-up 1.46 trillion, or 22% of that.
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  Now, discretionary spending, which is subject to annual
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  congressional approval, comprised roughly 25% of the
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  budget in 2023. This category includes defense
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  874 billion, transportation, 137 billion and education 305
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  billion. More than half of discretionary
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  spending is allocated to defense and area.
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  Trump has pledged to expand, not cut through, initiatives like a
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  new missile defense system. Now, given the makeup of the
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  budget, targeting only spending for Musk's proposed cuts would
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  require dismantling entire agencies or eliminating major
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  programs, a strategy unlikely to gain widespread political
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  support. Now, Trump announced that Musk
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  would be working alongside entrepreneur Vivek Ramaswamy as
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  Co leaders of DOGE. Their primary objective is to
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  identify and eliminate waste in federal spending by reducing
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  bureaucratic inefficiencies, cutting reduction regulations
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  and streamlining government operations.
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  However, experts warned that the new departments advisory role
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  without direct executive power could limit its effectiveness.
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  They said there's the executive branch that might be in the way,
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  the Congress might be in the way.
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  The Constitution is a bit of an obstacle coming at Douglas Holtz
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  Eakin, president of the American Action Forum.
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  Now, Musk's track record is reducing operational cost, of
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  course. It's notable, particularly an X,
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  where he slashed the workforce from 8000 people to 1500 people
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  after acquiring the company. However, applying similar
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  methods to government agencies could prove more challenging,
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  given the complexities of federal regulations and legal
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  constraints of the US. Federal government operates
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  under a labyrinth of rules, and sweeping reforms would require
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  approval from Congress, where previous attempts at smaller
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  budget cuts have faced significant hurdles.
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  In 2022, Republican lawmaker struggled to pass legislation
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  cutting just $130 billion from discretionary spending.
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  Even with the GOP controlled Congress, any substantial
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  reductions to the budget would face resistance, especially from
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  lawmakers concerned about the potential impacts on essential
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  services. Additionally, Donald Trump
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  campaigned on promises to enhance Social Security benefits
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  by removing income tax on them, which would likely increase, not
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  decrease federal expenditures in that area.
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  Now the DOGE department, the new department will reportedly
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  partner with the Office of Management and budget, the OMB
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  to pursue structural reform. But the goal of completing their
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  work by July 4th of 2026. Now Trump described the
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  initiative as potentially the Manhattan Project of our time,
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  signaling its ambitious scope. The department's official
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  account on X has already begun messaging its goals to the
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  public, stating working overtime to ensure your tax dollars will
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  be spent wisely. Now, despite this enthusiasm,
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  many analysts remain skeptical. Sounds to me like an outside
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  Commission that will give OMB recommendations on what they
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  should do to improve government efficiency, and as such its
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  powers are entirely advisory now without formal authority, the
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  commission's recommendations may be easy for other parts of the
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  government to just ignore. Musk's close relationship with
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  the Trump could provide the Commission some influences.
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  The billionaire spent election night at Trump's Mar A Lago
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  estate and has been involved in several meetings with the
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  president-elect and Republican lawmakers.
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  However, this connection also raises concerns about potential
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  conflicts of interest. Tesla, SpaceX and other Musk
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  owned companies hold substantial contracts with federal agencies
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  including NASA, the Department of Defense, and critics argue
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  that Musk's dual roles as a tech CEO and government advisor could
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  lead to bias recommendations that favor his own business
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  interests. Ethics experts have pointed out
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  that for Musk to comply with federal conflict of interest
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  laws, he would need to either divest from his companies or
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  recuse himself from discussions involving agencies where his
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  businesses have dealings. However, since DOGE is
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  technically just an Advisory Board created by the president
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  rather than Congress, it might skirt standard ethics rules,
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  leaving questions about oversight and accountability.
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  If it's Commission, it's outside the government, then the
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  president takes the advice or he doesn't.
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  Now, Tesla's frequent disputes with regulatory agencies like
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  the National Hwy. Safety Patrol exemplify the
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  potential conflicts. The NHTSA has mandated recalls
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  and open investigations into Tesla vehicles or safety
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  concerns, actions that Musk has publicly criticized as
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  overreach. Now, a Government Efficiency
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  Commission Co led by Musk could propose cuts to regulatory
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  bodies like NHTSA, potentially limiting their ability to
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  enforce safety standards and directly benefit Tesla.
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  Now SpaceX, Muska's rocket company, also faces regulatory
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  scrutiny, particularly from the FAA.
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  Delays to Spacex's Starship program have been attributed to
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  FAA reviews, which Musk has argued are excessive.
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  And Spacex's contracts with NASA and the Department of Defense
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  total billions of dollars. And any budgetary or regulatory
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  changes recommended by DOGE could impact these projects.
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  No X has faces own challenges, including ongoing investigations
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  by the Federal Trade Commission of the FTC and the Securities
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  and Exchange Commission of the SEC.
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  Since taking control of the platform, Musk has overhauled
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  its operations and content policies, drawing criticism for
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  potentially prioritizing his political views over consumer
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  protection and transparency. His public endorsements of Trump
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  and active promotion of pro Trump content on X have fueled
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  concerns about the platform's neutrality during the election
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  season. And while Musk has described his
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  involvement with DOGE as an effort to delete the mountain of
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  choking regulations, legal experts warn that if he directly
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  participates in decisions affecting his own businesses, he
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  could violate federal ethics laws unless he receives a waiver
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  from the president. Now, such waivers have been very
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  rare and controversial in the past.
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  Now, environmental issues may also pose a challenge to Musk's
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  plans. His AI venture XAI is building a
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  supercomputer facility in Memphis, TN, which has drawn
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  criticism from environmental groups due to its reliance on
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  gas turbines and its location near predominantly Black
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  neighborhoods. The Environmental Protection
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  Even Agency, or the EPA, has been urged to investigate the
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  potential health impacts of this project, which could complicate
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  any attempts by DOGE to propose cuts to environmental
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  regulations. Now, despite these concerns,
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  Musk and Ramaswami seem determined to push forward with
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  their vision for reducing government waste.
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  Musk's social media presence suggests he plans to keep the
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  public engaged, even promising a leaderboard for the most
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  insanely dumb spending of your tax dollars.
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  Whether his approach will resonate with viewers and voters
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  or translate into meaningful policy changes remains to be
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  seen. And while the DOGE initiative
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  has garnered significant attention, its ultimate success
• 9:00
  will hinge on the willingness of Congress and the White House to
• 9:04
  adopt its recommendations. Without a clear legal mandate or
• 9:08
  bipartisan support, the department may struggle to
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  implement its goals. For now, the debate over Musk's
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  appointment in the feasibility of its proposed cuts is likely
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  to dominate discussions in Washington, highlighting the
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  challenges of balancing efficiency, transparency and
• 9:24
  ethical governance. Hey, thank you so much for
• 9:31
  listening today. I really do appreciate your
• 9:33
  support. If you could take a second and
• 9:35
  hit this subscribe or the follow button on whatever podcast
• 9:38
  platform that you're listening on right now, I greatly
• 9:41
  appreciate it. It helps out the show
• 9:43
  tremendously and you'll never miss an episode.
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  And each episode is about 10 minutes or less to get you
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  caught up quickly. And please, if you want to
• 9:52
  support the show even more, go to patreon.com Stage zero.
• 9:58
  And please take care of yourselves and each other.
• 10:00
  And I'll see you tomorrow.