Redburn Reads (April 27, 2025)
Mr. Musk Goes to Washington
Elon Musk is no Jimmy Stewart. Now that he is on the verge of leaving Washington – returning to Texas to try to salvage the Tesla brand he has so effectively trashed – what has Musk accomplished in his 100 days?
Image credit: Mr. Smith Goes to Washington, 1939..
A lot, just not what he promised. When Musk was appointed to head the so-called Department of Government Efficiency, he claimed that the nation faced an existential crisis because of the gaping federal budget deficit.
He vowed to take a chainsaw to $2 trillion from the federal government’s nearly $7 trillion in annual spending, insisting there were vast quantities of waste, fraud and abuse hidden in the government’s accounts. Then he cut the goal to $1 trillion. After laying waste to foreign aid, education, veterans’ health, scientific research and the civil service in general, DOGE eventually scaled back its claims of savings to $160 billion.
And rather than eliminating so-called waste and fraud, Musk, on behalf of President Trump, has mostly achieved his “savings” by cutting the heart out of valuable government programs that protected the most vulnerable and invested in America’s future prosperity. Even with his blunderbuss approach, even DOGE’s numbers, several journalistic organizations have shown, are exaggerated.
But worst of all, the truth is that DOGE hasn’t actually narrowed the deficit – it has widened it. That’s largely because the cuts to the workforce at the IRS will end up losing far more in tax revenue than the cuts in spending. But there are also many other unaccounted costs due to often illegal ways DOGE went about trying to slash the federal workforce.
Among the several recent pieces attempting to assess Musk’s impact after his announcement he would scale back his Washington presence, a substantive article in the New York Times by Elizabeth Williamson does a nice job of summarizing the shortcomings of the DOGE effort.
President Trump and Elon Musk promised taxpayers big savings, maybe even a “DOGE dividend” check in their mailboxes, when the Department of Government Efficiency was let loose on the federal government. Now, as he prepares to step back from his presidential assignment to cut bureaucratic fat, Mr. Musk has said without providing details that DOGE is likely to save taxpayers only $150 billion.
That is about 15 percent of the $1 trillion he pledged to save, less than 8 percent of the $2 trillion in savings he had originally promised and a fraction of the nearly $7 trillion the federal government spent in the 2024 fiscal year.
The errors and obfuscations underlying DOGE’s claims of savings are well documented. Less known are the costs Mr. Musk incurred by taking what Mr. Trump called a “hatchet” to government and the resulting firings, agency lockouts and building seizures that mostly wound up in court.
The Partnership for Public Service, a nonprofit organization that studies the federal work force, has used budget figures to produce a rough estimate that firings, re-hirings, lost productivity and paid leave of thousands of workers will cost upward of $135 billion this fiscal year. At the Internal Revenue Service, a DOGE-driven exodus of 22,000 employees would cost about $8.5 billion in revenue in 2026 alone, according to figures from the Budget Lab at Yale University. The total number of departures is expected to be as many as 32,000.
But maybe reducing the deficit was never Musk’s true aim after all. While DOGE’s operatives have been rampaging through the federal government, one thing they have managed to do is extract reams of data collected by various agencies.
Here’s a useful compendium of Musk's data vacuuming by David Pepper in his Saving Democracy Substack and some fascinating speculation about what he and his minions could do with the information.
A friend of mine who works in this space warned me in February about the risks presented by Musk and DOGE.
Here’s what he said then—Musk has…
“plugged himself into the personal information of every American. This is a digital coup, embedding itself into the core I.T. infrastructure of federal agencies with little oversight and only selective “transparency.”…
This isn’t just unauthorized access -- it’s a full-scale redirection of the government’s digital nervous system into the hands of an unelected billionaire.
The existential risks here -- financial manipulation, mass data exploitation, and unchecked digital autocracy -- are no longer hypothetical. We're watching a truly unprecedented transfer of governmental power to a private entity in real time.”
He Called It…
As he predicted, we’ve seen weekly stories of DOGE accessing a wide variety of government data, including Social Security, medical and tax data. (As just one example:)
Immigration
“Attorney General Pam Bondi and the Justice Department have given DOGE access to a system that contains sensitive data on millions of legal and undocumented immigrants, including their addresses and detailed case histories.”
“DOGE is knitting together immigration databases from across DHS and uploading data from outside agencies including the Social Security Administration (SSA), as well as voting records, sources say. This…could create a system that could later be searched to identify and surveil immigrants….The scale at which DOGE is seeking to interconnect data, including sensitive biometric data, has never been done before, raising alarms with experts who fear it may lead to disastrous privacy violations for citizens, certified foreign workers, and undocumented immigrants.
“They are trying to amass a huge amount of data…It has nothing to do with finding fraud or wasteful spending … They are already cross-referencing immigration with SSA and IRS as well as voter data.” . . .
Musk’s Departure: “Extract and Run”
Given these stories, I circled back with my friend to see what he thought about Musk “leaving” after months of DOGE rummaging around federal government and our data:
“I still speculate their goal is to siphon off as much data as possible and funnel everything into AI systems designed to automate the bureaucracy. The people they’re hiring (as I said before) are still being mocked, but you can do a lot of damage armed with a modern AI free of restraints with intent to break things….
I then asked about Musk leaving: “Can you explain what a bunch of tech bros could’ve gained by rummaging around our data for the last four months?”
“Trump’s orbit is always temporary, and I’m not sure Musk expected him to voluntarily nuke the economy. Tesla is in meltdown—he has no choice.
But…they can already declare victory. All evidence points to a data extraction operation. The goal is to ingest critical datasets, train them behind closed doors, then build a centralized “government brain” (an AI platform) that they can license back to the government.”
“It’s been 100 days. They’ve hit labor, treasury systems, veterans affairs, HHS, cloud services used by federal agencies. etc. etc. They likely have hundreds of terabytes of data already in their control. To answer your question, he has what he needs and they can do this without him now.”
So I asked: What are examples of what they can do with all that data?
“This is where speculation can run wild, because they are high-capacity systems. We’re living in the science fiction books I used to read as a kid.
Granting good intentions, they could create this system then hand it over to the federal government to receive proper oversight and be used as a resource for modernizing and centralizing government. Security and transparency would be paramount and would drive the process from here. That clearly isn’t happening.
They could also use it to build complex identity profiles on every entity in the country (individual or otherwise), sort citizens with a Chinese-style patriotism score. Identify causal chains that humans might never see, silently flag people for surveillance—run models to predict their likely activities, create internal/secret preferred risk scores, assign automated threat ratings to individuals, simulate population reactions to new laws/ideas, etc. etc. It’s too much.
But that’s the point. These systems are extremely powerful. The people with the keys can do whatever they want…
But I also don’t want to paint too much of a mustache-twirling villain picture. This is high-stakes improv; they’re clearly out of their depth. It’s executed chaotically. They have retreated on stated goals, Musk wants out and the administration wants him out. We’re entering a recession, the dollar is tanking, even our status as reserve currency is in question. But what will be left in the wake of all this is power asymmetry in this bizarre populist landscape…is an unthinkably powerful tool.”
Finally, lest we forget, Musk is still the world’s richest man, with a host of businesses that will benefit from the connections he has forged with the Trump administration. He is still well-positioned to shape regulations and influence Washington’s contracting decisions. To keep up with Musk’s ongoing activities, I highly recommend another Substack offering, Musk Watch, created by Judd Legrum. Here’s an excerpt from it’s latest report:
Earlier this month, Federal Communications Commission Chairman Brendan Carr lobbied European governments to adopt Starlink, the satellite communications service operated by Musk’s SpaceX. The State Department has followed suit, promoting Starlink to U.S. allies by favorably contrasting it to satellite providers from China. “It is important to ensure satellite services provided by untrusted suppliers, such as those from China, are not permitted to operate in your country,” read a State Department undated memo, obtained by Nextgov, explaining how U.S. officials should discuss satellite services with allied countries.
The memo references why some European countries are wary of Starlink; SpaceX, and thus Musk, maintains the authority to shut down the service at any time, as it has during Ukraine’s use of Starlink. From Nextgov:
If asked about the Starlink satellite-communications service, U.S. officials are told under the memo to acknowledge that parent company SpaceX may restrict the delivery or operation of ground terminals as local regulations require — and otherwise as it pleases.
At the Justice Department, its two largest agencies — the FBI and the Drug Enforcement Administration — are considering the adoption of Starlink, according to FedScoop. Both agencies submitted requests for information (RFI) regarding Starlink last month, indicating they are in the early phase of potential procurement. The bureau, which is weighing the purchase of between five and 100 Starlink Mini Kits, said in its RFI that Starlink “offers the ability to maintain internet ability while responding, and on scene of, various incidents.” The DEA’s RFI said that low Earth orbit (LEO) satellites, the kind that make up Starlink’s 7,000-strong constellation, would provide communication access for agency personnel “in regions historically underserved by traditional satellite providers.”
In its consumer business, Starlink is trying to balance out demand among its U.S. customer base. In high-demand markets like San Diego and Phoenix, Starlink has added a $250 one-time “congestion charge” that new customers must pay to start using the service, per PC Mag. But in much of rural America, excluding the South and the Midwest, Starlink is offering $200 “regional savings” discounts to new customers as well as free dish installations in some areas.
One factor driving Starlink’s ballooning growth is the lack of competitive alternatives, particularly on the consumer level. While Paris-based Eutelsat operates OneWeb, a constellation of roughly 650 LEO satellites with lower speeds than Starlink, it only serves government agencies, businesses, and other large enterprises. On the retail side, Amazon’s Project Kuiper is one of the main contenders looking to challenge Starlink’s dominance. But the venture has reportedly encountered significant production delays. So far, Project Kuiper has only constructed a few dozen satellites, despite promising the FCC to have more than 1,600 satellites in orbit by the summer of next year. From Bloomberg:
The slow pace, combined with rocket launch delays, means the company will probably have to seek an extension from the Federal Communications Commission, said the people, who requested anonymity to discuss confidential matters.
The agency, which has oversight of transmissions from space, expects the company to have half its planned constellation of 3,236 satellites operating by the end of July 2026. To meet that requirement, Amazon would have to at least quadruple the current rate of production, which has yet to consistently reach one satellite a day, two of the people said.
Industry analysts say getting an FCC extension should be straightforward, but some have begun to wonder whether that assumption will hold given that Elon Musk, who runs the rival Starlink service, is advising the White House on spending and personnel decisions.
To meet its FCC deadline, the Amazon subsidiary is scrambling to book flights aboard crafts from Blue Origin (founded by Jeff Bezos), United Launch Alliance, and SpaceX.
Yep, Elon Musk is no Jimmy Stewart, who manages to fight corruption in the classic movie Mr. Smith Goes To Washington. Instead, Musk embodies it.