Can Elon Musk save the US Government $2 trillion?
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See the word for details hello and thanks for download the mall or less podcast. We are the program that looks at the numbers in the news, and I am charlock mcDonald. Since present elect Donald trumps decisive Victory in this year's american election, he's been busy appointing key members of his new cabinet, one of which was.

we have a man who is a seriously high I Q. You know, i'm a person that believes the rocket three weeks ago.

How about this?

Give up for the greatest capitalist in the history, the united states, america. Elan melon musk, famous entrepreneur.

mean lover, and the worlds which is man according to forms. He's settling his sights on tackling the U. S. Economy as he co head the proposed department of government efficiency, or doge. Now, some of you might recognize doge IT was a popular meme of a dog reacting to certain things in broken english. This mean then became attached to a quick to currency called doge coin, which started as a joke before weirdly being taken seriously once elon musk started promoting IT.

But we set up dog. yes. How much do we you think we can rip out of this? How is spite button? Well, I think do at .

least two trillion. wow. Now here, at more or less, we love all numbers and not to brag, but we're pretty good at counting.

So we can tell you that two trillion U. S. Dollars is a big number.

In fact, it's almost thirty percent of the amount the U. S. Currently spends. So can you do IT? It's not possible .

to cut two trillion hours out of the federal budget in a year without destroying the federal government. So for example, I could lose a third of my body weight if I cut off my arms and legs, but I would destroy myself in the process.

Oh, that's linder. Bill must bursting that particular bubble. SHE is the professor of public policy and public finance at the harvard Kennedy school in the U.

S. As the BBC does not condone any removal of limbs, we thought IT was important to find out where the two trillion U. S.

Dollar gure came from. The origin of the two trillium is that he simply looked at the twenty twenty four budget and saw that we are spending six point eight trillion, and we're bringing in four point nine trillion in revenues. So he said, okay, that's two trillion dollars. So that's what we need to cut in order to get to a baLances budget.

A baLances budget is where the government needs a as much revenue as IT spends. One of the problems that will face doge, if they do want to make dramatic sweeping cuts, is the way the federal spending system instructed. There are some things that are in shined in law so incredibly difficult to cut. This is called Mandatory spending.

The so called Mandatory spending is spending that is set through a mula. So the formula is, for example, for social security, anyone who turns sixty two is eligible to claim social security. And if you climate sixty five or sixty seven or seventy, whatever, you get a certain amount.

So that is set by formula. And he doesn't go through an annual budget process. And the Mandatory spending makes up about sixty percent of the budget.

Man and SHE spending includes things like social security, pensions make up a large part of this, then this, medicare, free medical care for older people, veterans programs, income security programs and more. Last year, IT totalled three point eight trillion dollars. More than half went to social security and medicare.

Now, although the trumpet administration would find IT very difficult to cut these programs, they could toddle them a bit and cut spending. But these moves would all have to pass through congress. And that would be difficult because older people are more likely to vote. So politically is tRicky. IT would be much easier for them to change, so called directionally spending money that voted on and assigned every year.

And this is the spending, which includes the defense department, the energy department, the transportation department, the health department and pretty much everything else the government does, as well as a certain portion of this social directionally spending, which is sent to states and local governments.

While it's easier legally to adjust or potentially cut, discussion spending is much lower. The Mandatory spending last year, I was at one point seven trillion dollars. So even if elon cut all of the directionally spending, he still wouldn't have enough to baLance the budget, plus he wouldn't have an army.

Now those of you who are quick with arithmetic may have noticed that one point seven trillion plus three point eight trillion does not a six point eight trillion budget make the rest of the money is spent paying off the government debt and the interest on that debt. But do you mask and trump have a point? Is that waste to cut? There .

certainly is a lot of waste. And one of the problems in the U. S.

Government, federal spending is that we are not good at stopping doing things that no longer makes sense. So give you an example. We still mt.

The penny coin, the single penny coin, which costs about three cents for every penny, that is that. And we spent about two hundred million dollars a year, just maintain the penny. I mean, one of the areas where I do agree with deal on musk is around the f thirty five stealth fighter.

We have spent some two trillion dollars on this fighter. IT has been plagued and be set by problems for years and years and years and years and years. IT is almost impossible to get them into the air, which is something that for a plane is kind of the basic requirement.

These are clear examples of easy cuts musk could make, but one of the issues that dog will face is that it's quite difficult to measure just how much wait there is. For example, the pentagon headquarters of the U. S. Department defence has never successfully passed a four or IT, so it's currently impossible to follow the pay prayer of where all the money is going. What he, lan and dog could do is consult with people who've already baLanced the budget, someone who's managed this name mythical feet, someone like.

though I was assistant secretary of commerce for management and budget in the clinton administration during the four years in which we did baLance the budget and paid off some of the debt.

they did this with a catalogue of measures, including increasing corporate taxes, taxes on social security benefits and fuel tax. They also got rid of some tax deductions and reduce spending on the defense budget from four point three percent to two point nine percent of G. D.

P. But since then, the world has changed. As at the economy.

spending has gone up. There were really three main drivers, hugely increased spending. There were two very expensive wars in iraq, afghanistan, that were paid for essentially through borrowing.

There were three tax cuts, two under president bush and one under president trump, in his first effort, which dramatically reduce the amount of revenue coming into the country. And then there was all of the spending and stimulus around code. In addition, as the population has aged in the nine states, as IT has in europe, the demographics have shifted. So the so called Mandatory spending programs, uh, social security and medicare, those programs have really grown along with the population.

Interest rates have also gone way up from the historical lows in the nineteen nineties. So what can be done? Well, Linda believes that there are ways to get government spending down and income up.

For example, their attacks, loopholes to closed taxes you could raise and tough decisions you could make about the retirement age. Donald trump s is also promising big tariff on imports, which might raise some money. But two trillion dollars with the .

trillion number over a decade is a realist to goal. But as I said, the only way you could cut two trillion out of the budget in a year is in the shooting yourself in the head kind of mechanism.

Elon musk and dogs, rather you than me. Thank you to professor Linda bilmes. That's all we have time for this week.

If you have any questions or comments, please write into us more or less a BBC C, O 到 U。 K. Until next week. goodbye.

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