In the world of finance, a write-off is a polite way to describe a massive investment that incinerated capital with nothing left to show for it but a tax deduction and a lesson learned. In Washington DC, however, it appears that they call it the Department of Government Efficiency. Elon Musk finally offered a candid post-mortem on his brief but chaotic tenure as the spiritual leader of the department.

Shortly after the department was announced, he posted a meme on his everything app depicting himself and his co-head Vivec as the Bobs, the two consultants from the cult classic film Office Space. For those who haven't seen the movie, the Bobs are brought into a poorly managed software company called Initech to streamline operations. They are the embodiment of sterile corporate absurdity. They speak in buzzwords. They've no understanding of what the employees actually do and they ultimately fire the wrong people like the competent software engineers while promoting the incompetent ones who simply know how to play the corporate game. Comparing your new government department to a pair of fictional consultants famous for being useless antagonists was certainly a choice. And as it turns out, it was a prophetic one.

The Economist's data team was doing something far less exciting, but far more revealing. They were reading the daily Treasury statements or DTS. The DTS is effectively the federal government's daily checking account statement. Every working day, the Treasury publishes a detailed list of cash withdrawals from its primary deposit account. It doesn't care about press releases, ceiling values, or projected savings. It only cares about cash out the door. The Economist found that in the first three weeks of the new administration, despite the announcements of massive savings, federal outlays averaged $30 billion a day. When compared to the same period the prior year, spending hadn't fallen. It had actually risen.

Investigations by Politico and Futurism revealed that Doge was using a metric known in government procurement, a ceiling value, to calculate its wins. When they cancelled a government contract, they didn't count the amount of money actually being spent. They counted the maximum theoretical amount that could have been spent over the lifetime of the deal. One of the more egregious examples was a shelter for migrant children. Doge claimed a savings of $2.9 billion for cancelling this contract. In reality, the shelter had been empty for a year. The agency was only paying a small retainer to keep the facility on standby. The actual cash savings from cancelling the contract was only about 4% of the headline figure.

Doge pushed for deep cuts at the Federal Aviation Administration and the National Highway Traffic Safety Administration. These are the specific regulators responsible for overseeing SpaceX rocket launches and Tesla's self-driving software. By cutting the budgets of these government watchdogs, Musk effectively removed the oversight that had been slowing down his own product testing. Then there's the matter of his other ventures. While Musk was slashing the budgets of rival government contractors, questions arose about how his own satellite internet company Starlink seemed to navigate the chaos unscathed. Critics noted that while legacy providers faced the wood chipper, Musk's companies were positioned to pick up the pieces with his team pushing to integrate private AI solutions presumably modeled on his own technology into the heart of the federal stack. It appears that in the rush to delete government waste, the department also managed to delete a significant amount of regulatory risk for its spiritual leader.

The claim that Doge could cut $2 trillion from the federal budget was not just ambitious. It was to use a technical economic term ridiculous. As we discussed in a prior video on this topic, the US federal budget is not a discretionary slush fund. Roughly 65% of all spending is mandatory, meaning that it is locked in by law for Social Security, Medicare, and Medicaid. Another 10% is interest on the national debt, which has to be paid unless the US wants to default and trigger a global financial crisis. That leaves just 25% for discretionary spending and half of that goes to the Pentagon. Since the Trump administration had vowed to increase defense spending, Musk was effectively promising to cut $2 trillion out of a non-defense discretionary budget that only contained about $900 billion to begin with. He could have fired every park ranger, air traffic controller, and FBI agent, shut down the Department of Justice, and turned off the lights in the White House, and he still would have missed his target by a trillion dollars.

Possibly the most foolish thing that Doge did was to send mass emails to staff offering paid redundancy. Such an offer will be accepted by the best workers who could easily find work elsewhere, leaving the government staffed by the people who have no other outside opportunities.

The dismantling of US aid targeted its global reach. This was the one area where Doge truly succeeded in slashing a department, feeding it, in Musk's own words, into the wood chipper. Because US aid was created by Congress, Doge lacked the legal authority to abolish it. Instead, they used executive power to fire its staff and cancel its contracts, effectively closing it by fiat. Interestingly, while this move horrified foreign policy experts, it was a political winner at home. The Financial Times reported that the gutting of foreign aid enjoyed broad support among voters, many of whom were reacting to viral claims from Musk, that the agency was sending $50 million in condoms to Hamas. As it turns out, the efficiency experts at Doge had confused the Gaza Strip with the Gaza province in Mozambique, where the US funds HIV prevention programs. US A had sent zero condoms to the Gaza Strip, but the correction came too late and the agency was already in the wood chipper. The geopolitical cost associated with these savings may be steep. Bill Gates told the FT that the picture of the world's richest man killing the world's poorest children is not a pretty one. Even Marco Rubio, the Secretary of State, testified to Congress that the debt toll from these abrupt cuts was surely not zero.

Despite the official sounding name and the presidential seal on the podium, the Department of Government Efficiency was not a real government department. Only Congress can create new departments and Congress did no such thing. Legally, Doge was an advisory committee. This concept is nothing new. In 1905, Theodore Roosevelt established the Keep Commission to reform the executive branch. In 1984, Ronald Reagan appointed the industrialist J. Peter Grace to lead the Grace Commission, which famously concluded that one-third of all income taxes were consumed by waste. Historically, these commissions follow a polite, predictable script. A group of business leaders spends a year writing a thick report. The president thanks them for their service, and the report is promptly filed in a basement, never to be seen again. Musk, however, had little interest in writing reports. While the legal setup suggested he was merely a consultant offering advice, the reality on the ground was very different. Consultants usually produced PowerPoint decks. Musk produced termination notices through a combination of executive orders and sheer administrative bullying. Musk's team bypassed the usual separation of powers. They didn't just suggest that the IRS should be leaner. They fired the staff. They didn't just recommend that US aid be reformed. They cancelled its contracts and locked the doors. In the past, the business approach to government meant bringing in a CEO to just look at the books. This time, it meant bringing in a corporate raider to strip the assets.

CBS Money Watch reported an estimate from the Partnership for Public Service suggesting that Doge's disruptions, including paid leave for suspended workers, the costs of rehiring wrongfully terminated staff and lost productivity, may have actually cost taxpayers roughly $135 billion.

There is possibly a broader cultural lesson to be learned here. For the better part of a decade, markets and politics have been dominated by lols. The idea that irony, memes, and sheer audacity could override fundamentals. We saw it in Dogecoin, the cryptocurrency. We saw it in the meme stock mania. And we saw it in the creation of a government department named after a Sheba Enu meme. >> I think the funniest name is is DOG, the the Doge Department of Governor Efficiency. >> As the Financial Times columnist Jamai noted recently, the joke just isn't funny anymore. When the LS meet the bond market, the bond market usually wins. The 10-year Treasury yield does not care about your mean game. It cares about the debt to GDP ratio, and that ratio is not improving. In his final days, as the shadow efficiencies are, Musk was asked if the project could survive without him. He replied with a cone. Is Buddha needed for Buddhism? It is a lofty comparison, but perhaps a more fitting question for the bond vigilantes watching the US debt pile grow is this. Is a calculator needed for accounting? The answer, it turns out, is yes. And for now, the calculator says that despite all the memes, the US government is still spending $30 billion a day. If you found this video interesting, you might want to watch my video on the Trump Musk blow up next. Don't forget to check out our sponsor, Built Rewards, using the link in the description. Have a great day and talk to you in the next video. Bye.

In the absence of spending cuts, the administration has pivoted to its favorite revenue raising tool, tariffs. The government collected 195 billion in custom duties in full year 2025, a massive increase from the previous year. Supporters claim that this windfall will pay down the national debt. The problem is that even with this historic surge, tariff revenue covers less than 3% of total federal spending. And worse still, the revenue stream may be temporary. The Supreme Court is currently hearing a challenge to the constitutionality of using emergency powers to impose these sweeping tariffs. During oral arguments in November, several justices appeared skeptical of the president's authority to bypass Congress on trade taxes. If the court rules against the administration, the Treasury could be forced to refund up to $168 billion to businesses. This would blow an even larger hole in the budget, leaving the government with higher spending, lower revenue, and a Manhattan project that produced nothing but a puff of smoke.

In his interview with Katie Miller, Musk attempted to frame the venture as having been somewhat successful, claiming that Doge had identified $200 billion in zombie payments. But the Treasury's ledger paints a very different picture. If Doge truly stopped $200 billion of waste, those savings were immediately consumed and exceeded by new spending. To call a project that presided over a net increase in federal outlays somewhat successful is a bit like the captain of the Titanic describing his voyage as a partial success because the band played beautifully until the end. Perhaps the most revealing moment of the podcast came when Musk let his guard down. When asked if he would do it all over again, he replied, "I don't think so." He added almost wistfully, "Instead of doing Doge, I would have basically worked on my companies."