Before you answer, we need to define the word “faith” and the word “reduce”?
For those not paying attention, DOGE stands for Department of Government Efficiency. It’s a team led by Elon Musk and Vivek Ramaswamy.
The DOGE mission is come up with ways to reduce significant amounts of government spending.
Unfortunately (or fortunately depending on your viewpoint), DOGE cannot do anything but make recommendations.
Shhhhhh, It’s a Secret
Team DOGE has come up with a 60 page list of items that it has yet officially published.
Why the secret?
I doubt there is much of anything in the report that’s genuinely new. For example, the big item that has been disclosed is eliminating the Department of Education.
Great, and I am all for that, but Ron Paul proposed that over a decade ago.
How Do We Define Faith and Success?
I have faith that DOGE can come up with a list of deficit reduction ideas simply by taking reasonable actions proposed long ago. O.K. I think DOGE will find some new stuff too.
But faith in coming up with ideas is quite different than actually reducing the deficit.
For this exercise “faith” means “delivery” of a package of ideas that Congress approves, Trump signs, and actually reduces the deficit.
I will grant DOGE full credit even for existing ideas such as eliminating the Department of Education, provided it gets done.
However, the true measure of success is the overall budget.
Trump can easily destroy the entire DOGE effort with handouts he has proposed such as no tax on tips, no tax on Social Security, no tax on overtime, and restoration of the State and Local Tax (SALT) Deduction.
In essence, there are two measures of success: Actual DOGE ideas implemented and how fast Trump ruins(or doesn’t) them elsewhere.
Slash Taxes to Zero?!
Here’s an Interesting Tweet by Peter St Onge on Slashing Income Taxes to Zero by upping tariffs, cutting military spending, and unleashing DOGE.
Donald Trump wants to abolish the entire income tax. It would be the greatest achievement since Andrew Jackson abolished the central bank.
So what happens to the economy, to Americans’ finances, and to the federal government?
Please click on the above link and play Onge’s 4-minute video.
I like Peter and I even agree with some of what he says, but his proposed scheme quickly falls apart under even a tiny bit of scrutiny.
Upping tariffs on China to 60 percent would likely kill all trade with China. Tariffs collected = zero.
Then what happens if China responds by cutting off the global supply of rare earth elements used in military equipment, EVs, nuclear weapons, microchips, and cell phones?
Similarly, what happens if Mexico cuts off medical supplies used in most US medical operations?
Onge’s first problem is he assumes all of the alleged benefits but none of the negative consequences including huge inflation when the US needs to produce everything internally.
The second problem is USMCA is a signed treaty. Trump might not give a damn about that, but 25 percent Tariffs on Canada and Mexico would not stand up to a court challenge, and it would also set a precedent of total global distrust in deals with Trump. Why would any country trust any deal Trump offers?
Third, in contrast to China, Mexico and Canada can easily respond one-for one on most tariffs. And they would.
Fourth, I totally agree with Onge on reducing defense spending. But Trump is not exactly listening to either me or Onge. Trump wants to increase military spending.
Fifth, Onge has too much faith in DOGE. Yep it might be able to come up with a trillion dollars in waste. Call it two trillion if you like. But how do you seriously propose getting that through Congress?
Republicans can lose no more than three votes in the Senate. And initially Republicans might not be able to afford more than one lost vote in the House.
Heck, I have serious doubts DOGE can even do something simple like kill EV tax credits.
If Trump delivers on the expiring tax cut package, plus no tax on tips, no tax on Social Security, no tax on overtime, and restoration of the State and Local Tax (SALT) deduction, the deficit will skyrocket no matter what the hell DOGE delivers.
Related Posts
On November 30, I noted A Tiny Republican Majority in the House Will Make Legislation Difficult
How many balanced budget hypocrites do you expect to see when Trump proposes big budget deficit increases?
Here’s the deal. If there are many as two defections, Republicans will not be able to pass much of anything if Trump tries to deliver his campaign promises like no tax on tips, no tax on Social Security, and no tax on overtime.
December 16, 2024: Trump Proposes Killing the $7,500 EV Credit and Seeks Tariffs on Battery Materials
Killing the EV subsidy is part of the ridiculously named Inflation Reduction Act. And the auto industry will fight to keep those subsidies.
Hopeful But Skeptical of DOGE
Compare the Reuters headline to mine. Reuters made it seem like a done deal. My headline says “proposes”.
Team DOGE has no authority to do anything but make recommendations. For all the hype, DOGE has not come up with anything that I would not have proposed.
For example, DOGE wants to eliminate the Department of Education. Great, but this is an idea that been circulation for at least a decade by Ron Paul and others.
The idea will die if four Republican Senators disagree or perhaps if as few as a couple of House members disagree.
Can DOGE even deliver something as simple as killing EV tax credits?
Minerals US Needs for Weapons and Technology
Please note China’s Puts Export Curbs on Minerals US Needs for Weapons and Technology
In a warning shot to the Trump administration, China tightens export controls on some dual-use minerals.
China produces an astonishing ~70% of the world’s rare earth minerals and controls nearly 50% of the global antimony supply [Used in communication equipment, night vision goggles, explosives, ammunition, nuclear weapons, submarines, warships, optics, laser sighting and more].
China controls about 90% of global rare earth processing on minerals mined elsewhere.
On October 20, I noted Trump Disavows His Own “Best in History” USMCA Trade Deal
If USMCA was so great, why is Trump now threatening to break it?
On December 15, I asked Should We Take Trump Seriously or Literally on Huge Tariff Hikes?
Onge is taking Trump literally without factoring in any negative ramifications. It’s pie in the sky economic madness.
When It comes to 25 percent tariffs on Mexico and Canada, I take Trump neither literally nor seriously.
Rather, it’s another Mexico will pay for the way type of statement. You might also recall Trump’s insistence that “Trade wars are good and easy to win.”
For a recap of how that ludicrous statement turned out, please see Trump Claims Tariffs Will Reduce the Trade Deficit. Let’s Fact Check.
Trump proposes 60 percent tariffs on China. Would that reduce the trade deficit? Where? How?
House Speaker Johnson Approves Another Reckless Spending Bill
Yesterday, I posted House Speaker Johnson Approves Another Reckless Spending Bill
Senator Rick Scott blasts House Speaker Mike Johnson over a massive 1500+ page spending bill.
Think of the message and ramifications. It should not be hard. I will come back to it in a bit.
An Interactive Exercise: What Would You Do to Balance the Budget?
On December 4, I offered An Interactive Exercise: What Would You Do to Balance the Budget?
Trump is proposing at least $2 trillion in deficit-expanding, tax cut ideas. DOGE would need to come up with $2 trillion just to keep the existing deficits.
I balanced the budget. Team DOGE hasn’t and won’t. But my proposals have the same philosophical issue.
How the hell is DOGE going to do a damn thing when Republicans will have a smaller majority than they do now?
The Republican House is beyond pathetic and you really think DOGE will cut trillions?
It’s easier to do something than undo it. Cutting the budget is mostly a case of raising revenues or undoing something that’s already done.
The idea tariffs could balance the budget is mathematically ludicrous. It would cause massive inflation, then crash global trade.
I came up with something mathematically doable and fiscally responsible. Unfortunately, the path through Congress would be difficult to impossible, but at least my math works.
I am open to alternative ideas provided they are mathematically doable. Balancing the budget with tariffs is economic silliness. And that’s even if DOGE could somehow cut $2 trillion.