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Economy

US economist gets candid on DOGE and the harsh financial reality Americans will face

2025-04-01

[FoxNews] Trump not 'fully aware' about 'serious' DOGE spending cuts, Harry Dent says

How on Earth did such a stupid fellow get a BS in economics from Wharton and grow a multi-billion dollar international empire? That said, it seems to me that Mr. Dent and Mr. Musk are substantially in agreement.

With Elon Musk’s Department of Government Efficiency (DOGE) reportedly on track to save hundreds of billions of dollars annually, one outspoken U.S. economist explained how cutting costs can paint a harsh reality for the economy.

"Trump is not fully aware of how these serious (and needed) cuts in federal spending will very likely tip the economy back toward recession," Harry Dent told Fox News Digital. "Secretary of the Treasury Bessent is warning there may be some pain, but the $2 billion intended cuts would be 7% of GDP and enough alone to cause a recession."

I thought the economy already was in a recession. Also, according to the internet, in 2024 the American GDP was over $29 trillion. Did Mr. Dent misplace his decimal point? I realize economics is considered a branch of philosophy rather than an actual science, but this seems a tad egregious, even for a non-math type. (When I ran the numbers past Mr. Wife, he asked, “Was he smoking dope?” which is another possible explanation.)

"Such a recession would be worse than most economists think as our economy has been stretched beyond compare with $27 trillion in combined fiscal and monetary stimulus since 2008, and still rising $2 trillion or so a year from record deficits despite monetary stimulus being pulled back," he noted.

Or is could be better, when all that inflating is balanced by deflationary cuts in government spending. Many things are possible — what matters is the most probable.

"It’s good to make such cuts, but naïve to underestimate the economy’s ability to absorb them at this time."

The farther down the road the can is kicked, the higher the cost when it stops. The end point is total collapse, and we can’t go back in time to when the cost would have been less, so right now this minute is the very best we can do.

Though DOGE’s mission to cut federal budgets, fire employees and gain access to potentially sensitive information has received widespread criticism from politicians and average Americans alike, the department is claiming its measures have netted $115 billion in savings.

Thus far. The projection is for accelerating savings as DOGE gets deeper into the files.

A combination of canceling contract leases, stopping fraudulent or improper payments and canceling grants is reportedly what led to the figure, according to DOGE’s website.

The estimated $115 billion in savings will save an average of $714.29 per taxpayer, based on the 2022 figures of 161 million individual income taxpayers.

Dent encouraged Musk to make budgeting decisions with a fine-tooth comb, as he sticks to his outlook that an economic downturn will hit the U.S. economy between 2025 and 2027.

But thereafter freeing up the funds that had been flowing to government spending will be available to the private sector, and the private sector always, always, always gets a better return on better targetted investments, right? So we have that to look forward to.

"My expertise was turnaround management. The secret of that is not just slashing costs, okay? You go in, it's always in the fixed costs. The background overhead is where 90% of the waste is," Dent told Fox Digital in a recent interview.

You mean like Welfare/Social Security and Medicaid/Medicare payments going to illegals and imaginary people? The DOGE team has already started working on that.

"I like change, and I can make 10 times the change in half the time if something's failing than if it's sailing along and you got to fight inertia, and people don't want this. And the change is always disruptive," he added.

A Harvard Business School graduate, the now-economist’s first job after college at consulting firm Bain & Company was similar in principle to Musk’s role at DOGE, he pointed out.

"You have to go in there and find out what's really causing those costs and cut those fixed costs. In other words, you have to do a surgical cut," Dent said.

"I could go into a healthy business and cut 20% in a heartbeat out of their fixed cost. And I can go in an unhealthy business, what I used to [do], and cut 50% of the fixed cost and that makes you lean and mean," he expanded. "That's what we need."

Though it seems to Dent that Musk – for the time being – is "mindlessly" making government savings moves,

…that sounds like he’s a reflex anti-Musker, rather than reasoned disagreement…

"it’s better than nothing."

"We don't need to say, 'We're just going to cut this whole department, we're just going to cut 50% of this department,’" the economist posited. "That's not the way to cut costs. And so I would say Musk, with all his experience, did not get a lot of it in the turnaround side like I got. And I didn't intend to get it, but I got it in spades."

"And anybody [who's] been around in turnarounds would tell you that you cut selectively to make yourself healthy. You don't cut out of panic to keep from just dying," Dent continued.

That carp smells three days old…

Posted by:Skidmark

#3 I always find it amusing when liberals accuse me of watching Fox News.

Posted by: Abu Uluque 2025-04-01 11:58

#2 They said the same thing about Argentina.

Posted by: DarthVader 2025-04-01 09:54

#1 Paul Krugman Part Deux

Posted by: Procopius2k 2025-04-01 07:54

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