Streamlining The U.S. Federal Government By Elon Musk: Rescue Or Ruin?

Donald Trump has appointed Elon Musk to lead a mission aimed at trimming the federal government.

The Department of Government Efficiency (DOGE), which Musk will head alongside another billionaire entrepreneur, Vivek Ramaswamy, will not be part of Trump’s Cabinet. Instead, it will function as an advisory organization operating “outside the government” while working closely with the White House and the administration to fulfill its ambitious mandate: “Dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.”

Donald Trump and Elon Musk theorize that only a major shock to the federal system will enable its streamlining, as all more measured attempts have failed. While federal governance insiders privately admit the system is highly inefficient, fixing it has proven an insurmountable challenge for leaders of both political parties.

Elon Musk has pledged to reduce the federal budget by one-third, achieving $2 trillion in savings. Like many of Musk’s ambitious goals, this one may seem exaggerated (he himself acknowledges being overly optimistic). Yet, as with his other ventures, he might achieve unprecedented transformation even if he falls short of his stated objective.

However, Musk faces an extremely constrained situation:

• Safety-net programs (e.g. food assistance, unemployment benefits, housing aid) consume 10% of the federal budget.
• Social Security (mainly aiding retirees and disabled individuals) accounts for 20%-25%.
• Healthcare programs (Medicare for seniors and Medicaid for low-income individuals) make up 25%.
• Defense absorbs 13%-15%.
• National debt interest takes up 8%-10%.

Donald Trump has pledged to maintain the various social and military programs associated with the top four budgetary items on this list.

The equation seems impossible – akin to the challenges Musk has tackled in his corporate ventures.

Consider the space industry, which he revolutionized through SpaceX, starting with a blank sheet of paper and his own funds from the sale of his second company (already called X). Developing and manufacturing the Falcon 9 rocket cost 550 million dollars, whereas NASA estimated the same system would have cost it 4 billion dollars. Thanks to SpaceX, transporting one kilogram of cargo into orbit costs 2,600 dollars, compared with 65,000 dollars with NASA’s Space Shuttle. Tesla, meanwhile, remains the only truly profitable Western electric vehicle manufacturer. These revolutions, however, came at the expense of workplace health and safety standards for employees at both companies.

Similarly, despite his frequent ethical lapses, Musk demonstrated that the microblogging network X could function nearly as well with 1,500 employees as it did with 8,000 – and with $500 million slashed from its operating budget. This approach has been noted by many American CEOs, prompting them to question their own cost structures.

More recently, Nvidia CEO Jensen Huang praised Musk for building, alongside his xAI team, a gigantic supercomputer in Memphis in just 19 days – an unprecedented feat he called “superhuman.” Huang remarked: “As far as I know, there’s only one person in the world who could do that; Elon is singular in his understanding of engineering and construction and large systems and marshaling resources; it’s just unbelievable.” Typically, assembling such a system, equipped with 100,000 Nvidia GPUs, would take a full year.

While Musk excels in engineering challenges, he is far less adept at addressing societal issues, as his missteps at the helm of X have amply demonstrated. He now faces a challenge of unprecedented political-economic magnitude and social complexity. His unique genius could enable the rescue of the U.S. federal system, just as his excesses might lead to its devastation, with dire human consequences. In this case, the road to hell could once again be paved with good intentions.

Political leaders tend to default to three behaviors: Believing their words are inherently impactful, considering that passing a law solves a problem (even, or even especially, when previous legislative acts have not been applied), and viewing any difficulty solely from a budgetary angle to both demonstrate their prioritization of the subject and claim to solve it. This triple tendency reveals a lack of management expertise – a logical consequence, as most leaders have managed little beyond their staff before assuming national responsibilities. Their inability to deliver results is fertile ground for populism, granting it license to act recklessly, as any action appears better to citizens than public impotence.

In this context, Elon Musk could bring unparalleled management expertise to the federal government. However, to do so, he must first tame his demons. The DOGE’s half-meme, half-crypto inspiration therefore promises to be just one of many peculiarities in this unprecedented experiment.