The Ford School's Betsey Stevenson recently spoke with Bloomberg, highlighting the false assertions of government saving increases made by DOGE. DOGE claims it has saved the government around $55 billion in spending through a wave of federal firings and other spending cut tactics. Stevenson countered that the real savings to date are likely much lower. "Right now, the estimates are that maybe DOGE has saved us somewhere between 1 and 7 billion dollars... when you add up the numbers on their website, you get 7.3," noted Stevenson. She explained that even though 7 billion to the average American's budget may sound like a lot, in the larger picture, DOGE has managed to save every American, at most, one or two cups of coffee.
Stevenson added that these savings won't make enough impact to be reflected in the bond market either. "If I was the bond market, I would be thinking a lot more about, not the billions being saved by Musk and cutting federal employment, but I’d be thinking about the trillions of debt that congress is contemplating through tax cuts at the end of this year. So, I think in terms of government borrowing, we’re still on growth and borrowing trajectory, and the bond market is probably laser-focused on where the economy is going and where interest rates are going." As government borrowing continues to increase, Betsey Stevenson urges that tax cuts can not be the sole solution for turning the trajectory around.
Not only is the amount saved by DOGE lackluster, but the government is also expected to operate at a less efficient pace as a result. Stevenson claimed, "They’re firing people who were providing value, they’re largely firing the youngest people because they’re firing all of these probationary people. The youngest people tend to be our most productive and least costly people, so we’re probably making the government more inefficient." She expressed Musk's efforts to cut spending are mostly "performance art" and used to distract citizens away from the trillions of dollars in tax cuts implemented for the "uber wealthy."
View Stevenson's full discussion with Bloomberg here.
