Tag Archives: doge

Trump’s cuts could cause (necessary) economic pain

On Sunday, President Trump posted the following to his Truth Social account:

ELON IS DOING A GREAT JOB, BUT I WOULD LIKE TO SEE HIM GET MORE AGGRESSIVE. REMEMBER, WE HAVE A COUNTRY TO SAVE, BUT ULTIMATELY, TO MAKE GREATER THAN EVER BEFORE. MAGA!

For any supporters concerned Trump’s resolve to cut federal spending might moderate that would seem to allay those concerns for the moment. And despite all the wailing coming from beneficiaries of federal largesse, the cuts made so far don’t even amount to a haircut for the federal leviathan.

To put them in perspective, the cuts proposed so far by the administration, based upon recommendations by Elon Musk’s Department of Government Efficiency (DOGE), are all within a the category of the federal budget called “Discretionary Spending.” Discretionary spending for fiscal year 2025 is projected to be $1.848 trillion. Overall spending is projected to be $7.028 trillion.

So, DOGE is only looking to make cuts to about one quarter of total spending. About half of that one quarter is Defense spending at $859 billion. Trump has said he wants to cut military spending, but that appears to be contingent upon China and Russia agreeing to cut theirs in a future, theoretical deal.

Meanwhile, the Senate just passed a spending bill that increases defense spending by $150 billion.

That leaves about one eighth of the budget affected by DOGE cuts. And DOGE certainly isn’t even trying to cut all of that one eighth.

Still, what cuts are made have the potential to punch far above their weight. Closing down USAID, for example, even if a lot of its funds are eventually spent, constitutes a major policy change given the revelations about what the agency was doing with those funds. Opponents of everything from covert regime change operations to censoring domestic political speech may be quite pleased with the difference firing just a handful of federal employees might make.

There is also the potential for outsized economic pain from cutting a relatively small percentage of the federal budget. Given the Federal Reserve’s $5 trillion tsunami of new money created since 2020, the U.S. economy is in an “everything bubble” and even marginal cuts to federal spending might be the pin that pops it.

Bubbles represent capital deployed for nonproductive ends and need to be popped. But no one is happy when it happens. Typically, bubbles blow up under one president and pop under the next. Guess who gets the blame?

Read the rest on Tom’s Substack…

Tom Mullen is the author of It’s the Fed, Stupid and Where Do Conservatives and Liberals Come From? And What Ever Happened to Life, Liberty, and the Pursuit of Happiness?

Why the Administrative State Must Be Abolished, Not Reformed

It is not only unconstitutional, it is antithetical to our most basic principles

Among the most interesting possibilities under the incoming Trump administration is his appointment of Elon Musk and Vivek Ramaswamy to head a new “Department of Government Efficiency.” While this will not be an official department, it will advise the president on how to significantly reduce the size and inefficiency of the administrative state. Musk has claimed the effort could reduce annual federal spending by as much as $2 trillion.

As welcome and necessary as such an undertaking may be, it does not nearly go far enough. In fact, its stated mission ignores the underlying problem with the administrative state: it is both unconstitutional and antithetical to America’s most important founding principles.

“Unconstitutional” is a much lower hurdle that the administrative state nevertheless fails to clear. The Constitution provides all sorts of powers that contradict founding principles. Chief among these is the Commerce Clause, which, however libertarians might like to think is limited strictly to prohibiting the states from imposing their own tariffs, is quite expansive. And the federal government still manages to abuse that power exponentially beyond its limits.

Much of the administrative state was built upon dubious interpretations of various commercial and personal behaviors as “interstate commerce,” including in one particularly ridiculous case producing milk on one’s own farm and consuming it on the premises.

Not only does the administrative state exercise power never delegated to the federal government in the first place, it does so in a wholly unconstitutional manner. The Constitution delegates the legislative power exclusively to Congress. Congress has no authority to re-delegate this to another branch of the government, but this is just what it has done in each case where it has authorized an executive branch agency to write enforceable rules.

Calling this legislation “regulations” instead of “laws” does not magically transform it into something else. Any written code either legally requiring or prohibiting human behavior is legislation. And delegation of the legislative power in whole or in part to another branch of the government would require a constitutional amendment.

In many cases these administrative agencies also usurp judicial powers by settling disputes in their own courts, presided over by administrative law judges. They thus unite the legislative, judicial, and executive power in a single agency, nullifying virtually all the Constitution’s structural checks on tyranny.

But even if the administrative state in its present form were remotely constitutional, or altered in form to become so, it would nevertheless be antithetical to liberty. The stated goal of every one of the agencies in the administrative state infringes the most basic rights of the individual according to the “general principles of liberty and the rights of man in nature and in society” according to Jefferson.

Read the rest on Tom’s Substack…