After the dust settled from the U.S. Presidential election, President-elect Donald Trump unexpectedly established an independent department outside the federal government system, namely the Department of Government Efficiency (DOGE). Trump referred to it as "the Manhattan Project of our time", with the goal to "dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies". The original Manhattan Project was a program started by the U.S. Department of the Army in 1942 to develop the atomic bomb. This time, Trump intends to "blow up" what he describes as the corrupt government bureaucracy. The department even carries a patriotic mission, planning to deliver a smaller, more efficient government to America as a "gift" on the 250th anniversary of the signing of the Declaration of Independence.

After the department was announced, Elon Musk and Vivek Ramaswamy were selected to lead it. Ramaswamy suggested reducing the federal workforce by 75% and expelling the children of undocumented immigrants born in the U.S. In September, he proposed laying off government employees based on their social security numbers and firing odd-numbered ones to halve the workforce. Musk recommended a 77% reduction, shrinking 428 federal agencies down to 99. On the other hand, he called on "high-IQ small-government revolutionaries" to join this new government via X. Commentators are largely pessimistic about the department’s prospects, believing that its ambitious goals will be difficult to achieve.

Some argue that the complexity of government governance is far greater than that of corporate governance and that the relevant experience in the latter is difficult to be effectively applied in the former. Therefore, the attempts by Musk and Ramaswamy are doomed to fail. Others point out that the practical scope of the DOGE department is very limited. Ramaswamy proposed cutting federal government spending by USD 2 trillion or more. However, the operational expenses of federal government departments account for only 1% of all fiscal spending, so even if these were completely cut, it would still fall short of the target. Reason magazine analyzed that the DOGE department’s operational space may be focused on expenditures that the federal government should not be involved in to begin with. For example, reducing federal grants to state governments, which accounted for 35% of state spending in 2023; or cutting the Pentagon’s budget, which, according to the Congressional Budget Office's deficit reduction plan, could save USD 995 billion over ten years.

It could also prioritize cutting subsidies and tax incentives for the private sector, including preferential treatment for aerospace, semiconductor, clean energy, electric vehicle, and healthcare companies. However, in reality, the space for these actions is also limited. After all, in recent years, the flexibility of the U.S. federal government's fiscal maneuvering has been shrinking.

According to China’s Donghai Securities' report U.S. Fiscal Policy: History and Trends, the U.S. government's mandatory spending in the 2024 fiscal year, which does not require Congressional approval, accounts for 73%, including statutory expenditures for social security, Medicare, defense, and nearly 13% for interest payments. Discretionary spending, which requires Congressional approval, only accounts for 27%, roughly USD 1.858 trillion. This portion includes spending on defense, education, environmental protection, infrastructure, and other areas, which cannot be entirely eliminated.

In contrast to the widespread view, ANBOUND’s founder Kung Chan pointed out a unique possibility that many commentators and media outlets have failed to fully grasp regarding the establishment of the DOGE department and Trump's true thinking. Trump hopes to leverage Musk's capabilities to create an efficient "super-government" to stand out among government institutions worldwide. The efficiency of such a government would resemble corporate management, which is why he enlisted Musk to take charge.

The view that corporate management experience is largely inapplicable to the government sector is difficult to defend. Both in the U.S. and throughout world history, there have been many instances where corporate management practices were successfully applied to government operations. During the Lyndon B. Johnson administration, the U.S. government brought in many entrepreneurs to reform government operations, and the Secretary of Defense, Robert McNamara, was formerly the president of Ford. The most successful example came during the Bill Clinton administration. Faced with bloated federal agencies, high budget deficits, inefficiency, and public services that were costly without yielding results, the Clinton administration, led by the Democratic Party, extensively borrowed successful practices from large private companies in terms of organizational downsizing, process simplification, and customer orientation, implementing three major reforms during its tenure.

The first was to reorganize and reduce administrative programs and agencies. The principle was to determine what the government should and should not do based on the agency's mission. Following this principle, administrative programs were merged, reorganized, and reduced, leading to a streamlined administrative structure.

The second was a major overhaul of rules and regulations. In 1995, President Clinton issued a series of directives on regulatory reform, requiring federal management agencies to abolish outdated and unnecessary rules, reward employees based on results rather than bureaucratic formalities, and change the long-standing focus on whether procedures were violated. From 1995 to the end of 1996, the federal government eliminated 16,000 pages of unnecessary federal rules that hindered the effective operation of public affairs and abolished a total of 640,000 pages of internal rules within various agencies.

The third effort focused on reshaping government culture. During President Clinton's second term, transforming the administrative culture of federal agencies became a key focus in reshaping government. The goal was to create a new administrative culture that was results-oriented, performance-based, and customer-centered.

The eight-year restructuring of the federal government has yielded significant results. In 1992, the U.S. federal budget deficit reached a staggering USD 290 billion, but by fiscal year 1998, it had turned into a surplus. Between 1993 and 2000, the restructuring involved cutting 426,200 federal civilian jobs, including 78,000 middle-management positions, making it the smallest federal workforce since the Dwight D. Eisenhower administration (1953–1961).

In the present day, the government of Argentina under President Javier Milei is another example of success. After taking office, Milei significantly reduced public spending by billions of dollars, slashing the number of government ministries from 22 to 9, cutting over 30,000 public sector jobs, halting all infrastructure projects, and even closing the state-run television network. These actions helped to ease the fiscal burden, bringing Argentina's inflation rate down from over 300% to 2.7% by October of this year. The country also overcame a severe budget deficit, with its sovereign credit rating upgraded by two notches to CCC. Foreign exchange reserves saw a net increase of USD 19 billion this year. As investor confidence in the Argentine market grew and a plan to forgive depositors' debts was implemented, the government successfully attracted nearly USD 20 billion in dollar deposits back into local banks.

At the same time, the Milei government successfully avoided street protests caused by a surge in poverty by protecting and even expanding certain welfare programs, with the strengthening of fiscal capacity being an important foundation. This allowed the government to effectively address the short-term spike in poverty rates. In fact, even the World Bank now believes that the worst period for Argentina has passed.

Therefore, corporate management experience can indeed be applied to government operations, but previous U.S. administrations did not persist in doing so due to their own limitations.

Furthermore, for the DOGE Department, the primary goal of layoffs or spending cuts is not just about reducing personnel or cutting expenses, but rather about improving efficiency. Over the past 15 years, inefficiency within the U.S. government has become increasingly apparent. In the field of aerospace launches, inefficiency and high costs have even led the U.S. to depend on Russia for long-term space launches, while the inefficiency of U.S. infrastructure has also been widely recognized. As for Elon Musk, there are several notable characteristics of his management practices:

1. Strong emphasis on first principles (focusing on the fundamental nature of things and the core issues of a problem);

2. Skilled at using technology and efficiency to reduce costs, not relying on monopolies to inflate prices, nor on establishing a stable banking system as the financial foundation. Musk's companies primarily use technology to lower costs in competitive markets.

3. Minimize intermediary steps in processes as much as possible;

4. Accelerate cycle times.

The job posting on the DOGE Department's X platform account stated that candidates must have exceptionally high IQs and be willing to work over 80 hours a week, focusing on the monotonous task of cost reduction, with zero compensation. It is clear that Musk and his team’s approach is to focus on the department's core business, selecting the most competent and passionate individuals to take on the work, maximizing the abilities of the right talent, and aiming for fewer people handling multiple roles rather than many people handling one. They do not consider additional factors like ethnic diversity when recruiting, nor do they intentionally seek to hire minorities.

After Musk acquired Twitter, he drastically reduced the workforce from 8,000 employees to 2,000, yet Twitter's operations did not collapse, and everything continued normally. At SpaceX, after a successful rocket launch, the key team members in the celebratory photo were few in number. Musk achieved what NASA had failed to do. This remarkable increase in efficiency shows how such reform logic, once implemented, could comprehensively improve the efficiency of the U.S. government at all levels, enhancing its ability to advance and implement policies.

With efficiency improvements, many aspects will be fully driven forward. With a focus on efficiency, the U.S. government’s requirements for government procurement will become more detailed and stringent, and cost audits will be more rigorous and thorough. This will force government contractors to actively reduce costs, improve efficiency, and enhance service quality. The cost of government procurement is also expected to decrease further, significantly increasing the likelihood of achieving government spending reduction targets. After improving efficiency and reducing expenses, the government will be able to free up more fiscal space to subsidize the truly needy and vulnerable social groups, further lowering the time costs for the public. There will basically be no situation where, as some people believe, a sharp reduction in social welfare for the public.

As for concerns that the government’s power structure might significantly constrain the Trump administration, while these worries are not without basis, they still seem somewhat exaggerated.

First, in this election, the Republican Party achieved a nearly sweeping victory, successfully gaining control of both houses of the U.S. Congress. Trump's almost crushing victory over Kamala Harris has made him a hero of the Republican Party. Even before and after the election, many prominent Republican figures defected, significantly strengthening the "Trump-centric" unity within the party.

Second, the Democratic Party still holds significant influence and will almost certainly interfere with Trump's subsequent governance and attempt to block his policies. However, in this election, due to dissatisfaction with the economy and illegal immigration, the Democratic Party's long-time stronghold, namely the minority groups, showed clear signs of division. A large number of Black and Latino voters shifted their support to Trump and the Republican Party. In order to maintain its main voter base, the Democratic Party may have to compromise on a series of issues with the Republicans and Trump, weakening its ability to oppose them.

Third, the U.S. President holds executive power, and reforms within the President's authority are carried out within his own team and administration. With Trump's support, the likelihood of Musk and others successfully advancing reforms is high. The eventual result could lead to a "super-government" unlike anything else in the world, resembling Tesla's "Gigafactories". As a political legacy of Trumpism, it could have a profound impact on the operation of the U.S. government.

Final analysis conclusion:

The "super-government" that Musk aims to build will be characterized by extremely high efficiency, which will bring about a series of positive changes on multiple levels. The improvement in efficiency is remarkable, and it will place immense pressure on governments around the world, as it will be difficult to compete with such a model. Although many of Trump and Musk's ideas are still just concepts or drafts at this stage, Trump's term is only four years, and both he and the Republican Party will likely focus more on deeply implementing "Trumpism" and solidifying its political influence. Their desire to do so will be strong and resolute. The traditional establishment in the U.S. will find it much harder to divert Trump's attention, as it did during his first term.

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Zhou Chao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.