Written by: Fan Fan
Editor: Odette
Source: Guoke
This August, Musk and Trump connected for two hours on X, discussing everything from international situations to domestic U.S. politics. At the end of the conversation, Musk summarized: 'Inflation comes from government overspending, we need a government efficiency committee to control expenditures.' Trump responded: 'You're best at layoffs; if you're willing to do this, I'm more than happy.'
After the conversation, Musk tweeted on X that he looks forward to serving America, 'No pay, no title, no recognition.'
At that time, everyone thought it was a bit ridiculous, as these two had always been talking past each other, but no one expected that the first major news after Trump's victory would be fulfilling his promise to Musk by establishing the 'Department of Government Efficiency', abbreviated as DOGE.
Musk also created a logo for the new department he leads; the fewer words, the bigger the issue. | x.com
DOGE obviously borrowed the name of Dogecoin, which Musk promoted, but Trump quickly issued an official announcement proving that this playful name is serious.
Do you remember the bloodbath triggered by the skyrocketing sell-off of Dogecoin? It’s quite ironic to name a government department after this.
'The great Elon Musk,' the announcement reads, 'will work together with Vivek Ramaswamy (Indian-American businessman, entrepreneur, Republican) to jointly lead the newly established Department of Government Efficiency, abbreviated as DOGE.'
In this announcement, Trump also declared that the importance of efforts to cut government spending is comparable to the Manhattan Project of modern times. The Department of Government Efficiency will collaborate with the Office of Management and Budget at the White House to promote a large-scale government structural reform, completing the reform by July 4, 2026. 'This is a gift for the 250th anniversary of the Declaration of Independence,' Trump said.
Announcement from the Trump-Vance administration
Once the news broke, the price of Dogecoin surged, it seems that trading concept stocks is the same in every country.
Currently, the DOGE department is widely recruiting talents on the internet, requiring 'super high IQ, working 80+ hours a week', and Musk himself will review the top 1% of candidates.
Musk's next step into politics
Two things Musk may do after taking office are to cut U.S. government spending and streamline administrative agencies.
In October this year, Musk publicly stated at a rally at Madison Square Garden in New York that he intends to cut at least $2 trillion from the federal budget. However, according to data from the Congressional Budget Office, of the $6.75 trillion in total federal spending for fiscal year 2024, discretionary spending, including defense spending, is estimated to be $1.9 trillion.
In other words, based on the current spending situation of the U.S. government, the amount Musk intends to cut is almost equal to all discretionary spending of the government.
Another thing he might do is lay off employees.
Currently, the U.S. government has about 428 administrative agencies, and Musk believes that 99 is too many. In other occasions, Musk has publicly called for the reduction of current administrative agencies, urging his followers to tell him directly if they think there are any that should be cut but haven't been. He has also claimed that he will establish a ranking in the future to list the most wasteful and foolish tax expenditures.
When Musk says he will lay off employees, he really will lay them off. In 2019, Musk rapidly laid off 10% of SpaceX's workforce via an email, and many employees found themselves unable to log into the work system immediately after seeing the email; after acquiring Twitter in 2022, Musk laid off 80%, drastically reducing the company size from 8,000 to 1,500; earlier this year, he laid off 28,000 Tesla employees.
Will the subsequent U.S. government face a layoff like this, and what will happen to the laid-off U.S. civil servants? Will the already low efficiency of the U.S. government become even lower due to staff shortages? These are all questions.
Things Musk plans to do after taking office: send emails to every government official asking what they did this week.
Moreover, besides serving as a government efficiency officer, Musk may further leverage his close relationship with Trump to intervene in more U.S. politics. For example, last Wednesday, after Trump's victory, Musk joined the first call between Trump and Ukrainian President Zelensky.
Can layoffs really reduce expenditures?
Although it looks beautiful, Musk's ideas may not necessarily be feasible.
American political economist Francis Fukuyama published an open letter to Musk the day before yesterday, mentioning that 'people generally believe the federal bureaucracy is bloated and overstaffed, but the reality is quite the opposite; in fact, the government is understaffed.'
Since 1969, the number of U.S. government employees has basically not increased, remaining around 2.3 million, as the U.S. government has been continuously streamlining its workforce. For instance, the Centers for Medicare & Medicaid Services oversee $1.4 trillion in spending, accounting for one-fifth of the entire federal budget, but they only have 6,400 full-time employees, meanwhile the office responsible for resettling millions of refugees has only 150 employees. If these personnel are cut, fraud and waste in the Medicare system may increase, and refugee situations could spiral out of control, making it difficult to accurately assess the economic losses caused by these side effects.
Additionally, some media outlets state that the U.S. fiscal issues should not be handed over to three billionaires (referring to Musk, Trump, and Ramaswamy, all wealthy), as they can only represent the interests of the privileged class, which is inherently a breeding ground for corruption.
Some say Musk's enthusiasm is reminiscent of the 1920s, when the last Treasury Secretary who aimed to significantly cut U.S. government spending, Andrew Mellon, would lay off an average of one Treasury employee per day and even reduced the size of paper currency to save on printing costs. However, later historians believe his belt-tightening plan accelerated the onset of the Great Depression in the U.S. in 1929.
Trump's Cabinet
Eight years ago, when Trump first became president, even he did not expect to win, so he was not well-prepared. According to the Center for Presidential Transition, the new president needs to be responsible for the appointment and transition of around 4,000 political appointees and staff, with many positions directly appointed by the Republican Party because Trump had not decided who should fill what position.
But this time it’s different; Trump came prepared and had already finalized the cabinet selections.
As of now, Trump has announced confirmed appointments:
Secretary of State, Marco Rubio, is tough on China and has been placed on China's blacklist, prohibiting him from entry.
Attorney General, Matt Gaetz, a congressman from Florida, has been accused of rape and sexual assault of minors and is under investigation by the House for misappropriating campaign funds.
Secretary of Defense, Pete Hegseth, a veteran of the U.S. Army and Fox News host, previously held the rank of major in the military.
Secretary of Health, Robert F. Kennedy Jr., an environmental lawyer and anti-vaccine activist.
Trump also stated that after taking office, he would further increase tariffs on China, forcing Nvidia to shift chip manufacturing back to the U.S., and repeal the Biden administration's executive orders restricting AI development. On the other hand, Trump is one of the few political figures who have stated 'I will never ban TikTok'; his election could bring a glimmer of hope for the TikTok ban.
