Published in Svenska Dagbladet, 2024-11-13. Translated from Swedish.
It is now confirmed — super-entrepreneur Elon Musk is stepping into Washington to clean up among American government agencies. The mission: cut 20,000 billion kronor from the federal budget.
Cast your mind back twelve years and try to explain this to someone if you can. A mildly confused Shiba Inu dog becomes popular on the internet. A meme emerges — an internet joke — about the dog misspelling its own name, and it gets called “doge,” a mangled version of the English word “dog.” Doge then becomes a cryptocurrency called Dogecoin, which at the time of writing has a market value of around 600 billion kronor — based on pure speculation. That is a higher valuation than companies like Volvo or Ericsson.
One of the most successful entrepreneurs of our time, Elon Musk, takes a liking to doge and Dogecoin. He uses the letters as an acronym for a proposed government body — the “Department Of Government Efficiency.” And now — in the early hours of Wednesday morning Swedish time — incoming president Donald Trump has appointed Musk to launch exactly that. What started as a joke is now becoming serious.
At a campaign event before the election, Howard Lutnick — responsible for managing the transition to Trump’s presidency — was on stage with Musk, fired up about how much government spending they could cut: “How much do you think we can rip out of this wasteful $6.5 trillion budget from Harris and Biden?” Musk responded with a broad smile: “I think we can do at least $2 trillion!” That translates to cuts of 20,000 billion kronor per year. At the time it was a hypothetical campaign promise from a billionaire hoping Trump would win. Now it may become reality. Together with former presidential candidate Vivek Ramaswamy, they will shape DOGE — the Department of Government Efficiency — to cut costs from the American state apparatus. The irony of appointing two chiefs and launching a new “department” to find unnecessary spending appears to have escaped them. “This will send shockwaves through the system,” Musk said in a statement.
Taking an axe to organisations is something Musk knows well. After buying the social media service Twitter in 2022 he laid off around 80 percent of the staff within a year. Outside observers predicted the service’s immediate death, not believing it could be run with so few employees. Apparently it could. X — as Twitter was renamed — rolls on today with around 6,000 fewer people on the payroll than when he bought it.
The American federal government is not a company, however. As former Treasury Secretary Larry Summers pointed out in a Fox News interview, only 15 percent of its costs relate to personnel. Firing every single government employee would therefore not be enough to reach 20,000 billion kronor in savings. To get there, he added, you would almost certainly need to cut healthcare programmes Medicare and Medicaid — a long-standing Republican ambition.
As a businessman, Musk has not only been good at cutting costs. He has also secured new revenue streams for his businesses. SpaceX carries out missions on behalf of the federal space agency NASA. Tesla has earned many billions from a type of mandated electric vehicle credits that competing car companies have been forced to pay them. Its car-buying customers have benefited from federal tax breaks introduced to encourage the electrification of the automotive industry. There may be savings potential in those areas too — but a fairly safe guess is that Musk will start looking at the other end of the government machinery first.
The situation is simultaneously somewhat bizarre and extraordinarily unprecedented. That money plays a large role in American politics is hardly news — but Musk has built himself an immense position of power in a very short time. Axios co-founder Jim VandeHei has described him as the most powerful private citizen in American history. He runs several billion-dollar companies in strategically important sectors, owns X as a media platform — and now steps across the threshold from the private to the public sphere. A government mandate to cut costs.
Those who have followed Elon Musk for a long time know that he tends to exaggerate and be optimistic about timelines. At the same time, he has delivered on multiple projects that most considered impossible — and did so simultaneously. Musk is not like everyone else. Now that he has a mandate to shake up government operations, one thing is certain: it will be messy. But it will happen. What the consequences will be remains to be seen.
