DOGE’s $2 trillion budget reduction goal is critical to the very future of constitutional democracy and capitalist prosperity in the United States. Indeed, the soaring public debt is now so out of control that the federal budget threatens to become a self-fueled fiscal doomsday machine.
Recall this sequence. When Ronald Reagan was elected in 1980 on a call to control the nation’s inflationary budget, public debt stood at $930 billion, or about 30 percent of GDP.
By the time Donald Trump was first elected, it had ballooned to $20 trillion, and today it stands at $36 trillion, or 125% of GDP. Furthermore, absent significant budget cuts at the level of DOGE targets, the federal fiscal equation will become hypercritical by the end of this decade. Therefore, by fiscal year 2034, annual baseline deficits will total $2.9 trillion, or 7% of GDP, according to CBO.
But even these huge figures are based on fairy tales with rosy scenarios. That means Congress will never again pass new spending increases or tax cuts, including the impending $5 trillion extension of Trump’s 2017 tax cuts that are set to expire. It also conveniently assumes that there will be no recession, recurrent inflation, high interest rates, or other economic crisis for the remainder of this decade and forever thereafter.
Furthermore, we assume that the rapid increase in total deficits and the rise in debt service costs will similarly remain stable in the bond hole. So, CBO inexplicably projects that by 2034, a deficit of 7% of GDP and $1.7 trillion in annual interest, or 4.1% of GDP, will be matched by a weighted average yield of just 3.4% on nearly $60 trillion of public debt. I am doing it.
Related articles
Yes, if dogs could whistle, the world would sing in chorus! But an additional 250 basis points on average yields would result in $3.1 trillion in annual debt service costs and $4 trillion in annual budget deficits by 2034. In other words, a loop of fate has been built inside the federal fiscal equation, and nothing is missing. If we can meet DOGE’s goal of cutting the annual budget by $2 trillion by the end of this decade, we will be able to reverse that explosive reality in a few years.
Indeed, if drastic budget cuts do not occur soon, soaring interest expenses will be the very thing that will start a fiscal wildfire. In theory, under CBO’s current rosy scenario projections, public debt would rise unabated to $150 trillion, or 166% of GDP, by mid-century (2054). Of course, the whole system will collapse long before the debt actually reaches this staggering figure. All that remains of America as we know it now will disappear underground.
So Musk and Ramaswamy’s DOGE team needs to be clear that they have to focus on saving $2 trillion a year relatively soon. That’s because the country’s fiscal ruin machine accumulates interest expenses so quickly that the $2 trillion in savings is spread out over long periods of time, such as 10 years, which is nothing more than a rounding error. That means federal interest spending is already over $1 trillion a year, and will exceed $2 trillion a year by the early 2030s, and we estimate that it will exceed at least $7.5 trillion a year by mid-century. It will be.
Put another way, if something drastic is not done now, such as saving $2 trillion a year from the budget by the end of President Donald Trump’s second term, America will be at its current level within 25 years. It will pay more in interest on the public debt than the entire federal budget. that’s right. Debt service would exceed current spending on Social Security, defense, Medicare, education, highways, national parks, Head Start, interest, and the Washington Monument.
Clearly, the vast federal government and its enormous spending and debt literally defy easily understandable and graspable solutions. After all, the current annual budget of $7 trillion equates to nearly $20 billion in federal spending per day, or $830 million per hour. And when you talk about 10-year budget projections, understanding literally disappears completely. The current CBO spending threshold for 2025-2034 is $85 trillion, just short of this year’s global annual GDP.
So, based on our experience, we believe the DOGE team should build the $2 trillion case around the target year and make some big savings for each of the different types. The latter can be used to create a detailed but easy-to-understand blueprint for organizing and communicating the much-needed federal budget housecleaning that DOGE is tasked with accomplishing.
In that context, fiscal year 2029 makes the most sense as a target year because it corresponds to the fourth Trump budget. It also gives enough time to phase in some of the deep cuts that will be needed, but they have little to do with the current fiscal governance of President Donald Trump’s second term. It’s not that far off in the future.
DOGE annual savings goals by component:
Cut the fat: $400 billion or 20 percent. Downsize muscle: $500 billion or 25 percent. Cut the bone: $1.1 trillion or 55 percent. Suffice it to say, the first bucket alone will leave you screaming to the heavens in the swamp. DC’s. But even that $400 billion in savings would completely eliminate 16 government agencies, cut nine more departments by 50 percent, reduce the balance of non-defense personnel costs by 34 percent, and generate $40 billion worth of annual savings. This can only be achieved by ending wasteful farmer subsidies and ending the $60 billion in subsidies completely. Reduce annual energy profiteering, including all EV credits, and reduce all other corporate benefits and subsidies built into the budget and tax code by $150 billion annually.
The fat and waste of this $400 billion unique federal budget is detailed in the following chapters. But here, if you attack the usual list of shock effects, such as outrageous research, stupid foreign aid projects, and even payments to the dead, which are often used to explain wasteful spending, you can reduce the decimal point in your savings goal. Suffice it to say that the following digits are barely obtainable. , eliminating this nonsense may itself be desirable.
For example, a recent “Exorbitant Spending” list shows $4 million wasted on “Dr. Martin.” There are countless other absurdities, such as Fauci’s “transgender monkey research” and $6 million to “USAID Fund to Promote Tourism in Egypt.” Still, removing these two items would only contribute 0.0005% to the $2 trillion savings goal.
Even some of the bigger ideas of this kind, such as timely removal of deaths from Social Security rolls, are unlikely to get very far. Indeed, 1.1 million Social Security recipients inherit their compensation each year, while retiring recipients currently receive an average monthly benefit of $1,907. Therefore, an additional month of recorded deaths costs a not insignificant $2.1 billion.
However, at this point, we are not actually experiencing much extra dwell time. The rolls are cleared each month based on newly submitted death certificates, which includes discontinuing payments to those who die during the month up to and including the last day of the month. Therefore, the average length of time a Social Security decedent remains on record is 15 days, which equates to a payout of $1.05 billion.
Of course, if Musk and Ramaswamy’s team could develop even better software to monitor, report, calculate final month benefits, and fire decedent in real time, the dwell time could be reduced by two-thirds. It may be possible to reduce it. This means that if we can remove people who die from Social Security 10 days early, we could save $700 million a year, or about 0.04% of the $2 trillion goal. So while there is definitely room to improve efficiency and eliminate outright waste and stupidity throughout the federal budget, unfortunately, rounding errors continue to add up.
In other words, without political “screaming and bloodshed,” it is unlikely to have an impact on achieving the $2 trillion goal. There is clearly nothing antiseptic about cutting the federal budget.
For example, even a dramatic 50 percent reduction in the current federal non-defense workforce of 1,343,000 would only save $100 billion a year by the target year of 2029. And this is a comprehensive number based on the current average cost of $100,000 per federal employee salary. Annual plus average allowances and subsidies of $44,000 – rising to $160,000 per bureaucrat by fiscal year 2029 due to inflation.
Therefore, achieving $2 trillion in annual savings requires a deep dive into the three areas listed above. The next five chapters lay out the most plausible and sensible route to $400 billion in “cutting the fat” savings, followed by detailed information on cutting $500 billion in unnecessary muscle annually from the national security budget. Provides the rationale for America First. Chapter 8 delves into the $1.1 trillion annual reduction in rights and domestic welfare backbone that would be required to achieve DOGE’s $2 trillion in savings. target.
But one thing should be clear from the beginning. This list of outrageous anecdotes highlights the stupidity and waste that pervades the federal government. But they have nothing to do with the factual analysis and philosophical U-turns that are actually required to successfully complete DOGE’s mission.
The views expressed in this article are those of the author and do not necessarily reflect the views of The Epoch Times.
