Elon's Real Goal at DOGE & How to Fix the Debt

"Econ 102" with Noah Smith and Erik Torenberg

This week, Noah Smith and Erik Torenberg talk about DOGE, Elon Musk's initiative to reform government spending, and explore why it might be more about ideology than efficiency. Noah talks about how he would fix the US debt beyond simply cutting waste. They also cover the future of major programs like Medicaid ($804B/year), the trade-offs between inflation and austerity, and how conservatives might reshape federal institutions despite education polarization. Plus: why comparing government efficiency to Twitter's headcount reduction isn't as straightforward as it seems.

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Highlights from the Episode:

• Noah argues that while Doge (Department of Government Efficiency) is publicly presented as a cost-cutting initiative, it's primarily an ideological project aimed at reducing "woke" initiatives in government.
• As zero-interest debt gets rolled over at higher rates (around 4%), interest costs are reaching historic highs as a percentage of GDP.
• Austerity measures will likely involve difficult choices for the middle class. Healthcare spending in the U.S. is disproportionately high compared to other wealthy nations.
• Government efficiency is harder to measure than corporate efficiency due to its multiple, often conflicting objectives, the influence of democratic processes, and congressional oversight, which complicates decision-making about program value.

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RECOMMENDED IN THIS EPISODE:

Noahpinion: https://www.noahpinion.blog/p/what-i-think-doge-is-really-up-to