Doge-saving measures under Elon Musk: Expert warns of massive consequences for the US economy

• Mass layoffs by Doge ahead
• Trump supports the plans of Elon Musk’s authority
• Expert sees the risk of the US economy

While the threatening setting that the new US President Donald Trump builds up everywhere with punitive tariffs ensures that it is internationally uncertainty, the Trump confidant clears Tesla boss Elon Muskstrong in Germany. With his Efficiency Authority Doge (Department of Government Efficiency), the richest man in the world wants to “increase government efficiency and productivity” on the one hand and, on the other hand, ensure a modernization of state systems at the same time.

Musk plans job clearing

Musk does not shy away from radical measures. In order to reduce the state apparatus, he demands the dissolution of entire departments. Especially in focus: the development aid authority USAID. In January, Trump had had the funds for the authority freezing that USAID was led by radical “insane” who wasted the money from taxpayers, he had emphasized several times in this context. In March, Secretary of State Marco Rubio then announced that more than 80 percent of the USASID programs will be hired that the rest should be continued in the future under the supervision of the Foreign Ministry.

There is also a large-scale clearing in other authorities: “There are around 428 federal authorities. Most people have never heard of people. I think we should make do with 99 authorities,” said the Tesla boss in October in a conversation with Tucker Carlson, which was published on the musk-owned platform “X”.

Elon Musk is all in.

(0:00) Elon Musk is all in on Donald Trump
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– Tucker Carlson (@Tuckercarlson) October 7, 2024

Most recently, Musk had publicly threatened with dismissals if they did not respond to an email in which they were asked to explain what they would have done last week. Trump’s support apparently has Musk with all of his plans: “We relieve all unnecessary, incompetent and corrupt bureaucrats from the federal workforce. That is what we do”. He wants to keep “the best people”, not the “worst”, quotes dpa from a speech by the US President at a conference of the American right near the capital Washington.

Analyst sees Musk plans as a headwind for the US economy

The end of the flagpole in the Musk savings plans could not be reached. The layoffs by Doge could be much larger than many expect, according to Torsten Slok, chief economist at Apollo Global Management in a contribution, from the market watch. “We start to worry about the downward risks for the economy and the markets,” continued the market expert.

He expects Doge to result in layoffs from one million people – the often communicated around 300,000 potential layoffs would not take into account the consequences for the 5.2 million people comprehensive workforce of the federal contractors, since Musk and President Donald Trump also target government orders and subsidies, Slok explains his high estimates.

The unemployment rate could increase significantly in view of the impending mass layoffs: “Every increase in layoffs will raise the unemployment figures in the coming weeks, and such an increase in the unemployment rate will probably have consequences for interest, stocks and loans,” he warns. Parts of the market are apparently not aware of the impending danger, as he emphasizes with a view to the historical lows in the spreads for US state bonds. “The question is whether the persistently high political uncertainty will have a negative impact on investment expenditure and attitudes,” said Slok. “The short -term downward risks for the economy and the markets are growing,” writes the expert.

Editor finance.net