When Elon Musk stood beside President Trump on the campaign trail in 2024, he made a promise that electrified fiscal conservatives: he would cut "at least" $2 trillion from the federal budget. It was a staggering figure—roughly 30% of total annual spending—and Musk delivered the pledge with the same bravado that had sent rockets to space and revolutionized the auto industry.

One year later, the results are in. The Department of Government Efficiency (DOGE), which Musk led for 134 days before departing amid controversy, has produced the largest peacetime workforce reduction in American history. But on spending—the metric that actually matters for taxpayers and debt markets—DOGE has had virtually no effect.

The Numbers Tell Two Stories

The DOGE experiment has produced strikingly divergent results on its two primary goals.

Workforce: Down 9%

Federal payrolls have shrunk dramatically. From 3.015 million workers in January 2025 to 2.744 million in November—a reduction of 271,000 positions, or roughly 9%. The Cato Institute called it "the largest peacetime workforce cut on record."

The cuts came through a combination of buyouts, hiring freezes, and—more controversially—mass terminations that sparked numerous lawsuits. Entire offices were shuttered. Thousands of workers accepted early retirement packages. Many others simply quit as morale collapsed.

Spending: Unchanged

But here's the uncomfortable truth: despite eliminating nearly 300,000 positions, federal spending hasn't slowed. The Cato analysis found that "DOGE had no noticeable effect on the trajectory of spending."

How is this possible? Several factors explain the disconnect:

  • Entitlements drive spending: Social Security, Medicare, and Medicaid account for roughly 60% of federal spending. These programs operate on autopilot, growing with demographics and inflation regardless of how many bureaucrats process the paperwork
  • Interest costs are surging: Debt service now exceeds $1 trillion annually. Cutting federal workers doesn't reduce the interest owed on $36 trillion in national debt
  • Contractor spending often increases: When agencies lose staff, they frequently hire contractors to fill gaps—often at higher cost
  • Severance and litigation costs: The workforce reduction itself generated billions in severance payments, legal settlements, and court-ordered back pay

The Goal Posts Kept Moving

Musk's spending targets underwent repeated revision during his tenure.

The original campaign promise: $2 trillion in annual savings. By early 2025, that was revised to $1 trillion. By mid-year, Musk was talking about $150 billion. When he departed in May, he described his tenure as "a little bit successful," claiming credit for stopping "$100 billion to $200 billion in zombie payments."

Independent analyses paint a different picture. CBS News reported that DOGE claims $160 billion in savings, but one analysis found those cuts actually cost taxpayers $135 billion when accounting for litigation, service disruptions, and inefficiencies created by the chaotic workforce reduction.

"You can't run government like a startup. When you fire 10% of a company's workforce, the remaining employees pick up the slack or you lose customers. When you fire 10% of the IRS, you lose tax revenue. When you fire 10% of food inspectors, you get contamination outbreaks. The second-order effects weren't modeled."

— Former DOGE advisor who departed in March 2025

What DOGE Actually Accomplished

Despite the spending failure, DOGE did achieve several notable outcomes:

Identifying Waste

DOGE teams uncovered genuine examples of wasteful spending—duplicate programs, outdated contracts, and the "zombie payments" Musk referenced. Some of these discoveries led to permanent reforms that will generate savings over time.

Inspiring State-Level Action

More than two dozen states have launched their own efficiency initiatives modeled on DOGE. Texas, Florida, and Ohio created formal commissions. Even Democratic-leaning states like Colorado established task forces to review spending. The cultural impact may ultimately exceed the federal results.

Forcing Technology Upgrades

DOGE's aggressive push to modernize federal IT systems—while chaotic in execution—accelerated adoption of cloud computing, automated processing, and digital services. Some agencies are now years ahead of where they would have been on technology modernization.

Changing Expectations

Perhaps most significantly, DOGE demonstrated that dramatic federal workforce reduction is politically survivable. Future administrations may be more willing to pursue efficiency measures knowing the sky didn't fall.

What Comes Next

Trump has stated that DOGE's work will "conclude no later than July 4, 2026." With Musk's departure, the initiative has lost its highest-profile champion and much of its media attention.

The remaining DOGE staff continue reviewing programs and identifying potential savings. But the bold promises of trillion-dollar cuts have given way to more modest goals. Current leadership speaks of "continuous improvement" rather than revolutionary transformation.

Lessons for Investors

DOGE's mixed results carry implications for markets and fiscal policy:

Don't Bet on Deficit Reduction

Anyone who assumed DOGE would meaningfully reduce deficits should recalibrate. The structural drivers of federal spending—entitlements, defense, and interest—are politically untouchable. Workforce efficiency, while valuable, is a rounding error in the fiscal picture.

Federal Contractors Face Mixed Outlook

Some contractors lost business as agencies were gutted. Others gained as depleted agencies outsourced more work. The net effect varies dramatically by sector and agency relationship.

Bond Markets Remain Watchful

Treasury yields have not declined on DOGE hopes. Bond investors correctly assessed that workforce cuts wouldn't translate to smaller deficits. The fiscal trajectory remains concerning regardless of how many federal workers process the paperwork.

The Bottom Line

DOGE represents both the possibilities and limits of applying private-sector disruption to government. Yes, the federal workforce was bloated. Yes, waste exists. Yes, 271,000 jobs could be eliminated without the government ceasing to function.

But spending is a different beast entirely. The programs that actually drive federal outlays—Social Security, Medicare, defense, interest on the debt—weren't touched. Couldn't be touched. They're protected by law, politics, and demographics.

Musk's grand experiment taught Washington a lesson that seasoned budget hands already knew: you can fire bureaucrats, but you can't fire math. The deficit will continue growing because the programs that drive it enjoy overwhelming public support.

DOGE's legacy may ultimately be cultural rather than fiscal—demonstrating that government can be questioned, challenged, and reformed, even if it can't be revolutionized. For taxpayers hoping for dramatic change, that's a disappointment. For those who feared a complete breakdown of federal services, it's a relief.

The experiment is winding down. The deficits continue. And the fundamental fiscal challenge facing America remains exactly where it was before Elon Musk arrived in Washington.