DOGE Goverment Spending Cuts

Macroeconomics and Politics
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The Department of Government Efficiency (DOGE) is a U.S. federal initiative established by President Donald Trump on January 20, 2025, aimed at reducing government waste and improving operational efficiency. Elon Musk was appointed as a senior advisor to the president in this endeavor.

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The DOGE is claiming to have saved up to $105 B until now, mostly canceling federal contracts and job cuts

  • Some of the job cuts have already been evident on some released data, but still very minimal and not to have any significant impact yet on a macro level
    • Challenger Job cuts announced government sector cuts of 62K highest on record
    • Initial claims for federal workers also increased significantly last week
  • Analysts say DOGE cuts will be insufficient and minimal because DOGE cannot cut spending authorized by Congress, and that DOGE’s true savings are likely around $2 billion–$10 billion, or 0.03%–0.2% of the federal budget.
  • Broader Fiscal Challenges:
    • Cutting 25% of federal employees would save only 1% of the budget
    • Eliminating USAID would save just 0.6% of spending
    • Payment error reductions* could yield *$100 billion
    • Social Security and Medicare are major cost drivers, as demographic shifts reduce the number of workers supporting retirees.

https://apnews.com/article/doge-firings-layoffs-federal-government-workers-musk-d33cdd7872d64d2bdd8fe70c28652654