Fiscal Management or Bad Management?
DOGE's ad-hoc approach is dangerous
I have advocated for years for a critical analysis of government spending and program evaluation. The federal debt-to-GDP ratio was 121% in the third quarter of 2024, totaling $36 trillion, raising concerns about how America will manage its debt in the future.
Even the most hawkish fiscal managers will tell you that a strategic approach and careful analysis of government spending is needed.
Elon Musk and the DOGE department's current approach is the opposite of careful analysis and program evaluation.
Cutting Bone
The goal is to trim the fat and reduce overspending. However, ad hoc, across-the-board cuts will damage the federal government's role in the short and long term and create mistrust between states, citizens, and the federal government. Regardless of your political leanings, you will be impacted as the government slashes expenditures. The impact of federal government cuts will be felt in blue and red states.
Program Cuts
DOGE is proposing a $2 trillion annual federal budget cut. Economists like Larry Summers and Glenn Hubbard have dismissed this proposal as unrealistic. The current federal budget is $6.8 trillion, which would require a one-third reduction in every program.
Currently, 70% of federal spending goes to Social Security and Medicare. Cutting these programs would drastically differ from the federal government's expected role.
Mixed Messages
The narrative behind the aggressive oversight of federal spending is to reduce government spending and the debt ratio. However, the proposed tax cuts conflict directly with that objective.
The extension of the tax cuts is expected to cost $4.2 trillion from 2026 to 2035. The extension will help the top 0.1% of earners receive a $314,000 tax cut, raising questions about the rationale for cutting government revenue when aggressively tackling the budget deficit.
The Role of Government
Taxes are the price we pay for the privilege of living in our society. No one loves paying taxes, but that is not the right question to ask. We should ask how much we value the benefits they provide.
Tax benefits will vary by person, so it is critical to evaluate collectively what we want to provide as a society. Allowing one person or organization to determine what the federal government offers leaves room for personal gain.
Excellent article. The fact they fired people then had to turn around to rehire them and are exemption departments from the weekly email check in shows that they are not efficient and have political motivations. The other fact is that those tax cuts were ineffective and will be so again especially when paired with his proposed tariff policy.