Donald Trump's Department of Government Effectiveness (D.O.G.E), initiated by Elon Musk and Vivek Ramaswamy with the support of the Trump administration, aims to cut federal spending by $2 trillion.
Key Risks:
⏺Practical Impossibility of Meeting the Goals:
- Plans include mass submissions, agency disbandments, and regulation rollbacks.
- However, some of the budget is protected by mandatory spending (like Social Security), making such details important.
⏺Political Instability:
- Musk's pressure on Congress has already come close to shutting down the government.
- This could worsen the debt crisis and cause further strain in the political system.
⏺ Market reaction:
- Stock markets are reacting negatively to these initiatives: rising bond yields confirm a guaranteed liquidity deficit.
- This creates risks of an economic slowdown and a possible deflationary shock.
Conclusion:
The D.O.G.E. initiative carries significant economic and political risks. If it fails, the United States could start with a serious debt crisis, loss of confidence in government reforms and a slowdown in the economy. Although the idea of cutting spending looks ambitious, its implementation requires more careful processing to avoid serious consequences. 🚨
