Political Economist Lizzy Galbraith joins hosts Paul and Luke to discuss the potential influence Elon Musk, heralded as the richest man in the world, and his Department of Government Efficiency (DOGE) on President Donald Trump’s policies, including answering several questions and touching on certain issues, such as:
What is DOGE?
Elon Musk will join the Trump Administration as head of the Department of Government Efficiency and a close advisor to the President. However, despite its name, DOGE is not an actual government department. It's an advisory body that can suggest budget cuts and deregulation, but Congress retains the power actually to make any changes.
Potential impact on the fiscal deficit
One of DOGE’s aims is to reduce government spending. The US fiscal deficit is unusually large, at nearly 7% of GDP. Musk’s proposed spending cuts could significantly reduce this, but previous attempts at large-scale government cuts, such as Reagan's Dream Commission, fell short due to political fights and vested interests. Meanwhile, potential tax cuts and tariff increases could complicate the fiscal picture.
Regulatory targets
Musk aims to cut regulations, particularly targeting the Department for Education, Environmental Protection Agency, and other regulatory bodies. The recent Supreme Court ruling overturning so-called Chevron deference could aid DOGE's deregulatory agenda because it limits regulatory agencies' power to interpret federal laws.
Efficiency or political agenda?
The word efficiency is normatively loaded. Musk's proposed cuts aim to reshape the very size and role of the US government, not just eliminate waste.
Musk's broader influence
Beyond DOGE, Musk wields significant geopolitical influence through his companies, such as X (formerly Twitter) and Starlink, a satellite network. His recent endorsements in European politics and interventions in UK legal cases highlight his growing political involvement.
Potential moderation?
Musk's support for high-skilled immigration and free trade may moderate some of the Trump administration's policies. However, it's uncertain how much influence he will ultimately have, and an eventual falling out between Trump and Musk is entirely possible.
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