In practically all Western countries, with very few exceptions, the State budgets each year include an ever-increasing volume of public spending compared to the previous year. In most cases, presenting public deficits, as public expenses exceed public income..
To balance the budget, or at least reduce the public deficit, the measure generally adopted is to raise taxes more and more, without even analyzing whether it is possible to reduce public spending. Once a specific public expenditure is consolidated, its withdrawal will harm certain groups, whether numerous or small, who would protest against such audacity.
The experience of the last fifteen years in the Eurozone shows that countries are only willing to reduce their public spending in extreme situations in return for international financial bailouts or in the face of high international pressure on their bonds. Greece, Portugal and Ireland were forced to undertake a sharp cut in their public spending to receive a financial rescue provided by the European Union and the IMF. The control of said cuts in public spending was supervised by the so-called men in black, representatives of the ECB, the European Commission and the IMF. Spain, during the government of Rodríguez Zapatero, was forced to make a strong adjustment in expenses, even cutting the salaries of civil servants by 5% and freezing pensions due to international pressure and the lack of demand for Spanish bonds. It was not a voluntary decision.
The US faces an unflattering situation in its public accounts. It has gone from $1 trillion of public debt in 1980, to $20 trillion when Trump was first elected, to $36 trillion today. Under current premises, the Congressional Budget Office (CBO) expects public debt to reach $60 trillion in 2033. Given this situation, unsustainable over time, the new Trump Administration will undertake an experiment worth following closely: A Department of Government Efficiency (DOGE) will be created, led by Elon Musk. Your goal is to reduce spending on 2 trillion dollars per year by 2029.
The objectives of DOGE are: to eliminate regulation issued by federal agencies, reduce the size of the Administration and save costs. There are thousands of regulations issued by federal agencies. It is considered that these agencies did not have the power to issue said regulations. Once all these regulations are identified, President Trump can immediately repeal them through an Executive Order.
The reduction of all these regulations will, in turn, reduce the bureaucratic costs of the structure of the affected agencies.s. According to Musk, the reduction in federal employees must be proportional to the canceled regulations. With less regulation, fewer officials will be needed, which in turn will produce less regulation in the future. One of DOGE’s goals is to help these officials move into the private sector. Some will receive incentives to retire early and others will receive compensation for leaving the Administration.
It is estimated that expenses not authorized by Congress exceed 500,000 million dollars. Some of these expenses are: 535 million a year for the Corporation for Public Broadcasting1.5 billion for international organizations or 300 million for the abortion multinational Planned Parenthood.
Other functions of DOGE will be to carry out audits of federal contracts, temporarily suspending payments. As an example, the Pentagon, with a budget of 800 billion dollars a yearhas failed its audit for the seventh consecutive year. Surely some of these expenses can be reduced without reducing the operational capacity of the Pentagon.
According to Elon Musk, There is a real possibility of significantly reducing the structural spending of the federal government without touching the essence of programs such as Medicare or Medicaid.ending unnecessary spending, fraud and abuse in public spending.
Additionally, although there is a 1974 law (Impoundment Control Act) that prevents the US president from stopping expenses approved by Congress, Trump has suggested that this rule is unconstitutional and that the Supreme Court (with a conservative majority) could have the same opinion. . If so, the cost cuts could be even greater.
Only Argentina, under Milei’s mandate, has undertaken a reduction in expenses of the magnitude that Elon Musk intends to carry out as man in black. It is worth following closely the evolution of DOGE’s achievements. If successful, Europe would have no choice but to adopt similar measures. Unfortunately, at the moment in the different European countries spending cuts are only undertaken under extreme situations and due to external imposition, as happened in the bailouts of Greece, Ireland and Portugal, or in Spain in 2010.
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