Elon Musk learning lessons from brief government adventure

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You can count on this eternal truth: Governments grow. Only the foolish would try to change the natural order of things and shrink the size and cost of government.

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A few governments back in the 1990s gave it a try. The need was urgent — taxes were high and governments still spent more than they collected. Rising interest costs chewed up increasingly large chunks of the operating budget. Something had to give.

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A few brave governments rose to the challenge and, with varying degrees of success, reduced costs and balanced the books. Those were the good old days of big public sector protests and smaller, but meaningful, public-sector reductions.

And then government did what government does – it resumed growing.

Things get interesting under Musk

For three decades, successive governments borrowed their way through good times and bad, ignoring the ballooning debt and growing the size of government.  Why worry? Be happy.

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Those of us who have a few scars from the old days wondered just how long politicians could go on ignoring fiscal gravity. Heck, a few of us even tried to get the decoder ring that would convert quantitative easing into something other than printing money.

So, when Elon Musk discovered government back in 2024, it piqued interest in the tiny cadre of folks who have attempted to shrink the public sector. Musk, who has done some serious slashing in the private sector and made bazillions of dollars doing it, had a plan to fix government. This was going to get interesting.

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The rhetoric was simple: Run government like a digital-age business and cut $2 trillion in waste and fraud. When U.S. President Donald Trump began his second term, Musk was unleashed through the newly created Department of Government Efficiency (DOGE). He and an army of young Turks ran rampant through government departments, tromping on a few laws along the way.

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Those were the heady days of firings — gleefully announced on X — and grand reports revealing “Joe Biden-era” waste and fraud. DOGE was a travelling media story that churned plenty of red meat for true believers.

This old hack had some doubts. It seemed to me that Musk was about to learn a few bitter truths.

The bitter truths behind government

First, government isn’t a business. Spending public cash requires a higher level of diligence and the same is true of cutting government programs. Washington (or Ottawa) is a long way from the wild west.

Second, waste is a function of size and big organizations just are not as efficient as smaller ones. My dad used to say that a little company could live well out of the trash bin of a big company. Making government act small is laudable, but it’s always an uphill climb.

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And third, outside eyes are helpful but it takes inside knowledge to make government more efficient. It’s fun to throw stuff at senior bureaucrats, but you need the professionals who actually run government to be onside for any serious, sustainable change.

The DOGE experiment didn’t last a year. It generated big headlines and modest savings. DOGE claims to have saved $214 billion, but the long-term savings are doubtful and government spending is up.

Governments can be shrunk and budgets can be balanced, but doing so requires sustained effort.

Musk has presumably learned those lessons and two more. First, one person’s waste is another person’s livelihood (see the carbon tax credits that earned Musk billions). Second, there is no such thing as a long-term Trump friendship (see Majorie Taylor Greene).

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