Elon Musk’s savings measures: Why do they cost almost as much as they save

There were full-bodied promises-just as you are used to from Elon Musk: he wanted to delete two trillion dollars a year with the specially created government department Doge from the US budget. When he was on stage with the “chainsaw for the bureaucracy” at the beginning of the year, his promise had already evaporated half. Last week he confessed: there will be only $ 150 billion. Now it is indicated that forgotten costs are likely to fizzle out almost completely.

The “New York Times” reports, citing experts. “Mr. Musk not only calculated the savings in a large extent, he also completely ignored that it caused exponentially rising costs,” quotes Max Stier. The financial expert should actually be full of efforts: he heads the “Partnership for Public Service”, an organization that wants to achieve more efficiency in the public sector. “These costs will burden the American public for years,” says Stier.

Musk’s chainsaw approach is primarily to blame. Instead of a cautious search for potential waste, Musk had chosen the same radical approach at Doge as when he took on his company Twitter, today X: He let employees throw out – then to look afterwards, which might have been needed. The procedure had some absurd consequences. For example, Doge had only noticed afterwards that those responsible had been released for the safety monitoring of the nuclear weapons. And was forced to reset them.

The procedure not only caused a lot of uncertainty, but also caused a lot of avoidable costs. On the one hand, there are the direct consequences of the layoffs: Musk had a package of financial remuneration laced in order to make the departure attractive, a payment of the salary promised until September. However, because many of the positions are needed, the authorities now have to pay part of the salaries twice – at new settings and the former employees sitting at home.

In addition, there are further costs incurred by the layoffs. According to complaints from many civil servants, several dishes deal with the procedure. Because the judges often decide against Doge, the state usually has to bear the costs of the procedures. “You can do all of these things you are currently doing,” explains Jeri Buchholz, who has worked as HR managers for several authorities for decades. “But not in this way. You either have to start from the front and proceed correctly, or you will be stuck to court for years,” the expert is convinced of the “NYT”. “The law is very clear.”

The costs of the chaotic dismissals could be so high that they almost completely eat up the savings, so a partnership for Public Services is therefore afraid. According to calculations by the experts, the costs of court proceedings, new and re-hiring as well as failures in the productivity of the authorities are likely to incur costs this year alone. So 90 percent of the savings announced by Musk.

After more difficult, however, the indirect failures could weigh in the long run: Because Musk also had the IRS tax authority collected, experts expect up to $ 350 billion less tax revenue over the next ten years. If the number of tax evasion increases because the authority is understaffed, this sum could increase to $ 2.4 trillion, “The Budget Lab” calculated.

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