Musk's Ambitious Plan to Streamline Government Efficiency

Tesla (TSLA) CEO Elon Musk has garnered support from finance experts for his idea to create a new government agency, the Department of Government Efficiency (DOGE). The proposed entity would oversee efforts to improve efficiency and reduce waste within the federal bureaucracy.

Streamlining the Bureaucracy for a Leaner, More Effective Government

Rethinking Government Regulations and Bureaucracy

Economist and senior fellow at the Independent Institute, Judy Shelton, believes Musk's proposal has merit. "I would like to see government cut, but in a thoughtful way," Shelton told Yahoo Finance. "It's not a matter of eliminating all regulations. It's a matter of subjecting them to a cost-benefit analysis." Shelton suggests that the government may have too many people performing tasks that do not directly serve the intended purpose of government services. "I would like to see more efficiency in the government," she added.Shelton's views align with Musk's long-standing criticism of government bureaucracy and the power of the Federal Reserve over the economy and asset markets. As an economic adviser on the Trump transition team, Shelton has been vocal about the need for streamlining government operations.

Musk's Efficiency-Driven Approach

Musk's track record of driving efficiency within his own companies suggests he may be well-suited to lead the proposed DOGE agency. When Musk took over Twitter (now X) in 2022, the workforce was reduced by 80%, from 7,800 employees to just 1,500. Similarly, Tesla has been in the midst of a 10% workforce reduction as the company navigates softer demand for electric vehicles.Musk believes this type of drastic streamlining could be replicated in the government, where he sees layers of bureaucracy impeding growth and making life difficult for entrepreneurs. "Musk may be ahead of all of us," Shelton said, acknowledging the potential benefits of his approach.

Tackling the Growing Federal Deficit

Musk's motivation for the DOGE proposal stems from his concern over the nation's growing federal deficit. At the All-In summit earlier this year, he warned of the potential for bankruptcy, stating, "Everyone seems to be whistling past the graveyard on this one."The Congressional Budget Office projects the federal budget deficit to reach $2 trillion in fiscal year 2024, growing to $2.8 trillion by 2034. Musk's DOGE agency would aim to address this issue by identifying and eliminating fraud and improper payments within the government, with the former president claiming the agency could achieve this within six months.

Unique Approach to Government Efficiency

While past commissions have attempted to balance the budget and cut fraud, Shelton believes Musk's DOGE proposal would be a unique and potentially more effective approach. "Musk may be ahead of all of us," she said, acknowledging the potential benefits of his efficiency-driven mindset.Notably, Musk has agreed to take on the DOGE role without a salary, title, or recognition, indicating his commitment to the cause. "No pay, no title, no recognition is needed," he shared on X, formerly Twitter.The upcoming Yahoo Finance Invest conference in November will feature Judy Shelton, providing an opportunity for further discussion on Musk's ambitious plan to streamline government efficiency.