Doug Casey on DOGE, Deficits, and the Coming Financial Earthquake
International Man: What’s your perspective on the claims Elon Musk and others made about the Department of Government Efficiency (DOGE) during the campaign, and how would you assess the actual progress they've achieved since then?
Doug Casey: I hate to sound pessimistic, because the idea of DOGE was excellent, but it's not making much in the way of progress. Musk first thought he could cut $2 trillion from the budget. I see how he could say that; it’s a very reasonable estimate. But as he discovered the depth of the resistance, he reduced it to $1 trillion. And now it's $150 billion—and he's probably not even going to be able to do that.
Why is it failing? One reason is that Congress has legislated and mandated most of the spending, and the hundreds of agencies that carry it out—and Trump can’t eliminate them. Congress has to abolish these programs and agencies. All DOGE can do is make recommendations.
It's true that the USAID building is closed, but apparently, many of its employees and programs have just simply been reassigned to the State Department or other places. They've made no progress on getting rid of the Department of Education.
I’m sure Trump very much wants to see DOGE be successful, but unfortunately its very name is "Government Efficiency," and I question whether we really want the government to be more efficient. The only way to solve the problem isn’t by making government more efficient, but by abolishing agencies wholesale—not just trimming some fat.
Will there be a fundamental change? That’s unlikely because, as I’ve said many times before, Trump has no philosophical center. Nor any understanding of economics, as evidenced by his tariffs scheme, which I think will fail utterly—and may even be the catalyst that sets off the Greater Depression. He’s flying by the seat of his pants.
Equally bad—or worse—he appears to want an industrial policy for the US, where he'll be making investments in all kinds of things to make the US a manufacturing center again. It's like what Argentina did under the Peronists. He does whatever seems like a good idea at the time…
International Man: With Elon Musk signaling his impending departure from DOGE, how do you foresee the future of DOGE and its initiatives unfolding without his leadership?
Doug Casey: As Chairman Mao once said, "The helmsman sets the course that sails the ship." And if the helmsman jumps ship, it's questionable whether other crewmen can take over successfully. Maybe they will. But without the public profile and moral suasion of Musk, I suspect that the people he leaves in charge of this advisory agency will flounder.
And, remember, DOGE itself has no power. But the Deep State has an immense amount of power, and they’re fighting it tooth and nail—both with go-slow policies and by filing lawsuits everywhere possible to stop it from happening.
In the long run, just cutting things back can't possibly work. It's like pruning a plant. Gardeners prune plants to make them healthier. If you just prune agencies, they’ll grow back even more virulent. The only solution is for scores of them—hundreds of them—to be pulled out by the roots and Agent Orange sown where they grew. That’s not happening.
For instance, take Ukraine. Zelensky has become a billionaire, as have all his cronies, and the fighting is still going on. Why? Because the US is still sending them money and materiel.
I’m afraid serious cuts are bluster, not reality. And where can they really cut things? Are they going to take money away from the Veterans Administration or military pensions? No. Certainly not from the military itself—Trump has said they're going to increase spending from $800 billion to $1 trillion. Are they going to cut back Medicare or Social Security? Abolish Medicaid? They should, but they won’t. These things, along with interest on the national debt, equal about 85% of spending.
They can't reduce the interest burden on the federal debt; it will continue growing with more spending and higher interest rates. Which, I suspect, are headed toward the levels we saw in the early 1980s, when the government was paying 20% for its money.
Musk has said he’s found thousands of egregious cases of waste, fraud, and abuse that should be referred to the Department of Justice. But that’s far, far more than the DOJ can handle. Where are the headlines about prosecutions for the things Musk has talked about? I’m quite disappointed. I’d like to see hundreds of heads on stakes, but it looks like the bedbugs and cockroaches are just going to hide while the lights are on.
International Man: Do you believe DOGE’s proposed cuts will lead to genuine, permanent reductions in government spending—or will they simply free up funds for Washington to redirect toward areas like defense?
Doug Casey: All kinds of obvious things aren't being touched—like the $50 billion the US gives to foreign governments around the world, a bottomless pit of graft. That's not going to change. Certainly not the $4 billion the US gives to Israel every year, or the $4 billion it gives to Egypt every year to bribe it into being Israel's BFF.
One thing that will kill any real progress from DOGE is subtle threats from the Deep State in general, and the praetorian agencies in particular. The NSA knows everything about everybody. If any DOGE employee gets too aggressive about breaking rice bowls or imprisoning bigwigs, they’ll be intimidated. These agencies know, or can fabricate, inconvenient things about them.
Or perform a cover up. Look at the Epstein case. We were supposed to learn what Epstein was up to, and with who. But everything’s being heavily redacted to protect guilty but well-connected people. The elite always close ranks to protect each other.
It’s all smoke but no fire. These agencies—with all the information they have—can destroy anyone who attacks them. If not now, while Trump is still in office, they’ll certainly seek retribution after he leaves. Our best hope—but it’s a long shot—is that Trump will realize that it’s kill or be killed, and will try to destroy them utterly while he’s still in power. That would be inviting civil war… but he has no real alternative.
International Man: Given that DOGE represents the most significant attempt to reduce government spending in generations, what are the implications if it fails?
Doug Casey: The economy is on the ragged edge, and with the tariffs creating economic chaos the Democrats may be re-elected in 2028. In fact, they may even win the midterms, which would guarantee that all of Trump’s efforts fail.
If the Democrats regain control of the government, they’ll redouble spending to try to forestall the Greater Depression and kick the can down the road for a few more years. And they’ll be supported by the American people, who are going to miss all the freebies the government was bribing them with. The average American has become so corrupt that he doesn’t want to have his doggy dish taken away.
For a while, during the first month of Trump’s presidency, it looked like it was going to once again be morning in America. But we’re finding out that morning only lasts six hours—and we’re already past noon. Things look quite grim.
International Man: As the US debt crisis intensifies, what steps should individuals take to protect their wealth—and what speculative opportunities do you see emerging from this turmoil?
Doug Casey: Even if we avoid a major war, I’m afraid the trend that’s been in motion for many decades is going to stay in motion and continue accelerating until the whole mess collapses under its own weight.
The US has become a giant multicultural empire revolving around the Washington Beltway. It could go down catastrophically the way Rome did. Or it may just degrade slowly like Spain or England. They still exist, but they’re hollow shells of their previous selves.
The financial, economic, political, and social problems we're laboring under are leading to a breakup of the country. So, instead of the US getting bigger with the extremely expensive acquisitions of Greenland, the Panama Canal Zone, and—God forbid—Canada, the US is more likely to get smaller.
All you can do is try to insulate yourself. The way to do that is by diversifying your money safely out of the country and continuing to build significant positions in gold, silver, and Bitcoin. With hopefully some successful speculations along the way.
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