Elon Musk's Plan for the US National Debt.

Basically, we're on a path to bankruptcy. America's on a path to bankruptcy, so we have to cut government spending, or we're just going to go bankrupt just like a person would. As we all know, recently, Donald Trump won the US election, and one person that took center stage in it all was Elon Musk. Musk was actually one of the Trump campaign's largest individual donors, pledging over $100 million to support the campaign. But interestingly, his involvement with Trump isn't stopping at just campaign support, as Elon is now expected to take an active role within the Trump Administration.

You might have seen this meme floating around in the last few weeks featuring Donald Trump, UFC founder Dana White, and Elon Musk, with the caption reading, "We're looking at the new CEO, CMO, and CTO of America." In the case of Elon Musk, it appears to be true that he will take on a sizable role in the government as head of government efficiency. At the suggestion of Elon Musk, I will create a government efficiency commission tasked with conducting a complete financial and performance audit of the entire federal government and making recommendations for drastic reforms. And Elon, because he's not very busy, has agreed to head that task force.

So, what is Elon Musk's role going to be? Is it going to be a good thing, or is it just going to be one big conflict of interest? Elon Musk, as was recently confirmed, is set to become the head of what he calls the Department of Government Efficiency, or you guessed it, DOGE for short. I think the funniest name is the DOGE Department of Government Efficiency. From what he said so far, it seems his primary goal is to simply cut out all the waste and inefficiency that's currently seen in the government.

From my research, this all boils down to two key objectives: one, reducing the government deficit, and two, deregulation. Now, I'll talk about both, but I want to start with the idea of reducing the deficit. Much like a person, the government has income, and it has expenses. If it wants to spend more than it earns, it has to take on debt to afford it. Similar to us, if we want to buy a new car but we can't afford it, then we have to take out a loan to buy the car.

Now, the problem with the US is that every year since 2000, the government has spent more than it earns. Each year, as you can see for fiscal year 2024, the government collected $4.92 trillion in revenue and had $6.75 trillion in expenses. In the income column, we have 49% from individual income taxes, 35% from Social Security taxes, 11% from corporate taxes, and then smaller amounts from customs duties, excise taxes, estate and gift taxes, and other.

Then, over in the spending column, we can see that 22% goes to Social Security, 14% to Health, 13% on interest, 30% on Medicare, 13% on defense, 10% on income security, and then lesser amounts for veterans benefits, education, transport, regional development, and all the other stuff. But now this is the important part: because the United States government consistently spends more than it earns each and every year, that leaves a shortfall. That shortfall has to be made up by the government selling bonds. It's essentially like an IOU. Investors give money to the US government, and the US pays them back after a certain period of time.

But the problem with this is these bonds require the government to pay interest, and as the debt pile grows and grows, so does the interest section on the expenses side of the equation, and that only makes the deficit worse. On top of that, there's the compounding factor at the moment of higher interest rates. Because the government runs a deficit, when their debts come due, they actually can't pay them back. So what they do instead is they will take on new debt to help pay down the old one. But the problem with this is if you took on a million dollars of debt at 1% interest and now you have to refinance at say 5% interest, that also starts to snowball the interest expense of the country. For the same outstanding debt, your interest expense is now higher thanks to the higher interest rates.

All of this is what Elon Musk has drawn attention to recently. This was him on Joe Rogan a few weeks back discussing this whole idea of this government efficiency agency. "Yeah, I mean the idea is pretty simple. It's that, like, we've got this suffocating massive federal bureaucracy. Government spending is like bankrupting the country. Our interest payments on the national debt now exceed the Defense Department budget. The Defense Department budget is like a trillion dollars a year. 23% of all government income—income taxes, tariffs, and everything—is just going to pay interest right now, and that number is continually rising. So if we don't do something, the entire government budget will be paying interest. There won't be money for anything. No, there won't be money for Social Security. There won't be money for Medicare. Nothing! That's where we're headed. Let—like, hello, wake up! Wake up!"

So we have to cut government spending or we're just going to go bankrupt just like a person would if that overspends. Elon sees the deficit worsening over time; he sees the refinancing of government debt at high interest rates ballooning the interest expense of the country, and he wants to change that. But the first step in stopping the snowballing pile of debt is to put the US in a position where after all is said and done in a given year, it doesn't need to take on more debt. That means America needs to either increase its income or reduce its expenses to eliminate the deficit and return to a budget surplus.

In Elon's planned role as the head of government efficiency, he wants to go through and tackle this issue by eliminating a lot of wasteful spending. "There are expenditures that don't make a lot of sense, uh, that are wasteful, and, uh, we need to put a stop to that. There's so much government waste that's going on that I would call it a target-rich environment. It's hard in every direction. There's just mad waste, and I think simply if people simply know that, well, if they waste a ton of taxpayer money, they're going to get fired, that will immediately improve the situation immediately."

This is exactly what he's got from running SpaceX, Tesla, and more recently X. At Tesla, he focused heavily on streamlining operations, reducing costs across the supply chain, and enhancing the profitability of the company while improving affordability for their customers. SpaceX is a testament to his commitment to optimization, where each advancement is aimed at either reducing rocket weight or maximizing cost-effectiveness. I mean, the whole reason that rocket got caught by the chopsticks in the first place is because they deleted the landing legs to save weight—that's optimization.

Then, of course, we know most dramatically at Twitter. Remember that Musk was able to implement substantial cost-cutting measures, notably reducing the workforce by 80% while maintaining the platform's core functionality. Now, some of those initiatives obviously weren't popular, but they were effective, and that's what he's all about—creating lean and effective operations.

"It's that skill set that he now wants to bring to the US government. The Department of Government Efficiency, you know, what that's going to do is really just take a look at all the federal expenditures and say if something is not—if you're not getting great value for money for your hard-earned tax dollars, cancel it. I would like to say it's a hard job, but actually it's not, because there's so much waste. So I actually think this is a fairly easy job, although we'll get a lot of opposition naturally from the entrenched interests that get the money and do nothing, you know, nothing good with it. They'll be grumpy about it, but the American people will be very happy that their tax dollars are being spent in a much more sensible way."

It obviously remains to be seen exactly what Elon will take a swing at, but one thing he has discussed quite extensively over the past few weeks and months is government agencies. This now leads us to the second part of the role that Elon wants to take, which is improving the efficiency of the government by consolidating or removing government agencies. This has two intended outcomes: to reduce the running cost of the government and also to start to deregulate or untangle the overlapping web of bureaucracy that, as a function of the system, stifles America's advancement.

"We're spending money on all these, like, these government agencies," he remarked. "I actually asked the AI, like, how many government agencies are there? And the government isn't even sure how many government agencies there are! It's like somewhere around 450 depending on what you call an agency at the federal level. That's almost twice as many agencies as years that America has existed. So we're creating agencies at roughly two agencies a year. Wow, yes, this is crazy! So we got the suffocating, this vast, suffocating federal bureaucracy that just gets bigger every year. And it eventually gets to the point where everything's illegal. You can't get anything done!"

This is where Musk's perspective on government reform becomes a bit more complex and, to a lot of people, much more political. I think most people can appreciate the idea of trying to right the ship when we're talking about the deficit, but when we start to talk about deregulation, this is where people tend to draw their own lines in the sand—some for deregulation and others against.

Now, I want to say that I am not at all trying to get political or enforce an opinion onto you guys. As I said on Instagram recently, I'm just a 29-year-old Australian dude, and I don't think most Americans would appreciate me chiming in and telling them how they should or shouldn't run their country. But I do still want to show Elon Musk's point of view because, of course, it gives this context as to the topic of this video, which is what will Elon Musk's role in the government likely entail. In his view, he has been very critical of overregulation in the United States, frequently using the football field analogy.

This is the idea that the game works best when there's one or two, or maybe three referees on the field, depending on which football you're talking about, and that makes for an exciting game where the players can play, but the rules are still enforced. But what you don't want is for there to be 10, 20, 50, 100, or 200 referees on the field, because as you put more and more referees on the field, there's less and less space and freedom for the players to play. The game obviously breaks down, and this is the analogy that Elon commonly uses for the state of American overregulation.

"For SpaceX, Starship was sitting on the pad, the rocket—we—the giant rocket—we could build the rocket faster than they could process the paperwork to approve the launch. So we're sitting there for two months. If you're dealing with one agency, that's one thing. But if you've got to deal with five agencies and the agencies will have to meet with each other, now you've got like 25 different meeting configurations that have to take place. You just can't make progress!"

"This is why we can't build high-speed rail in America. It's basically illegal!"

Musk's call for deregulation, however, obviously isn't without controversy. At the end of the day, regulations are often established for safety, environmental protection, and consumer rights, so the idea of scaling them back raises legitimate concerns. Critics worry that loosening regulations might lead to reduced safety standards or fewer protections for the public. For example, consider the National Highway Traffic Safety Administration (NHTSA), which enforces vehicle safety standards like seat belts, airbags, and crash tests.

Now, while this is admittedly a reasonably extreme example, if these regulations were weakened or removed, it raises the question: would automakers continue to prioritize safety, or would they be tempted to cut corners to reduce costs? While there may be potential for streamlining and simplifying the regulatory landscape, it's reasonable to be cautious about the consequences. At the end of the day, deregulation can have both positive and negative effects. Here's Musk's response to these concerns:

"We've got far too many government agencies. The federal bureaucracy has gotten out of hand, and we just need to pare it down to a sensible level. If it turns out that like, there's some regulation or agency that was doing something useful, we can put it right back. No problem! Like it's like, oh that regulation was important? No problem! We'll put it right back on the surface."

This approach seems practical, right? Testing out a leaner government and then restoring any crucial regulations if needed. But some might argue that it could be risky. What if a regulatory body is removed only to realize later that it was actually essential? Then there could be a period where people are impacted before it's reinstated, and in some cases, that temporary gap could have serious consequences for public safety, the environment, or other critical areas. So it's a fine line to walk in the regulation versus deregulation debate.

Another concern raised is the potential for job losses. Consolidating or cutting back government agencies would inevitably lead to some layoffs, and that's a tough reality. Losing a job is hard for anyone, and it's understandable why people worry about this aspect. Now, Elon has addressed this concern directly, and in his view, he doesn't want to cause anyone undue economic hardship.

"The point is not that people suffer economic hardship. The point is just that they're—it's better there are more productive things they can do in the economy, and it would be better if they did these other more productive things and we didn't have this vast pedal bureaucracy. So I was like, hey, you know, maybe like a couple years of pay would be good, and then they could take a vacation. They could take another job and get double pay. I mean, it's like, it's not like—it's not going to create an economic crisis. I think it's actually going to be really good. I think because, you know, people can move to where they're making products and services that are more useful to their fellow human beings."

So that’s the argument around potential job losses. But beyond that, there is one really big issue that definitely does need to be addressed, and it's causing quite a bit of stir right now. That is, if Elon is in charge of this deregulation in America, is it kind of a conflict of interest? Right? If Musk takes on this role in the Trump Administration, then he would potentially have influence over regulations that directly affect his own companies, like SpaceX or Tesla.

Elon has previously voiced frustration with regulatory bodies such as the FAA, which he feels has been slow to approve launches for SpaceX, and also with the NHTSA, which enforces safety standards affecting Tesla. Now, while a lot of people trust Musk's intentions, putting him in a position to alter regulations that impact industries where he has significant investments naturally raises concerns. This isn't necessarily a question of Musk's character; it's more about the risks inherent in allowing someone with vested interest to influence government policy in these areas.

On the one hand, there is certainly massive scope for cost reduction in the US government that would definitely benefit America's financial position. But at the same time, there are concerns on the other side of the equation too. "I think we need to take a look at all federal expenditures and say, is this really benefiting the American people, or is it not? And if it is, well, are we spending it wisely? Usually, the answer is no. So then should we spend less money and spend it efficiently? But there's got to be a clear benefit to the American people, or we shouldn't be spending money."

"And I think we also want to have extreme transparency. You know, so like no shady backroom deals or whatever—everything done in the open. Total exposure! You can see the mistakes that are made, the good things that are done, you can comment on it, you can raise concerns. This is—we want a transparent, open government. And, you know, because there will be mistakes that are made. With transparency comes trust, you know, and then you can see, okay, we made a mistake, we'll fix that, we'll do that, you know, and that’s the best way to restore trust in government. Not that you should trust government. You shouldn't trust government, but it'll be—you can trust it slightly more if there's at least transparency."

Hopefully, this video gives you a reasonably balanced look at both the pros and the cons of Elon Musk's potential new role in the US government. Definitely let me know your thoughts as well down in the comments section below. Let's keep the discussion going down there, 'cause I think this is a really interesting one.

But beyond that, if you did find the video useful, please leave a like. And if you've made it this far through the video and you like what you see, please subscribe. We're on the charge to a million subscribers, but we do need your help in getting there. So if you wouldn't mind, please subscribe. We really, really appreciate it.

But with that said, guys, that will just about do us for this video. Enjoy the rest of your day, enjoy the rest of your week, and I will see you guys in the next video. By the way, I'm in Dubai right now! How cool is that? It's pretty cool. Alright, back to regular programming next week. I'll see you then!