Elon Musk has done some incredible things in the past year to help advance our economy, both on the technological front and the civil service side. It is my opinion that Elon Musk has done more for this country than possibly any person on the planet in the past year. In 2024 alone, he built the world’s largest AI supercomputer, achieved a world’s first mid-air capture of a rocket booster with giant mechanical arms, and started the Department of Government Efficiency now in the middle of a rescue mission to save the United Stated from a spiraling debt crisis. Love him or hate him, Musk’s accomplishments are beyond compare.
Elon is known for putting his mind on incredibly difficult tasks and getting them done in a short window of time that no person thought possible. For example, right now we are in the middle of an AI race where big tech companies like OpenAI, Google, Meta, Microsoft, and Amazon are competing to build the biggest, fastest, smartest large language models (LLMs). Elon Musk then comes in with xAI and decides to catch up to these big tech companies with a supercomputer called “Colossus” in only 122 days start to finish while the physical buildout—installing 100,000 liquid-cooled Nvidia H100 GPUs, networking, and power infrastructure—was completed in a mere 19 days. Nvidia CEO, Jensen Hyang, commented, “There’s only one person in the world who could do that—Elon Musk is singular in his understanding of engineering.” Given the competitive nature of AI development, the buildout more than likely influenced the tech industry to buy more GPUs and catch up to xAI thus possibly creating another wave of demand for chips, servers, liquid cooling, cabling, and space. It was a silent motivator that amplified the competition of the AI race.
Aside from xAI, Elon always has other things going on. He leads some very important businesses and organizations that lend to his reputation of getting things done. He heads SpaceX, X.com (formerly Twitter), Tesla, xAI, and more recently the Department of Government Efficiency.
The current administration and DOGE are thinking long-term. To balance the budget within 10 years, given current economic and revenue projections, federal spending growth would need to slow from a projected 4.26% annual growth rate to 1.27%. If DOGE and Elon can’t come in and make big consistent spending cuts, then I don’t think anyone else can. The extensive budget cuts have sparked significant panic in Washington, D.C., as the Department of Government Efficiency (DOGE) has been shutting down various departments deemed no longer necessary, resulting in job losses for many government employees. DOGE job cuts might be around 80,000 so far, but this lacks firm confirmation from official sources as of now. The situation is evolving, and DOGE’s impact will likely clarify with time. Job cuts are part of DOGE's broader strategy to reduce the size and influence of the federal government. While an official figure for total firings or layoffs is unavailable, it's estimated that potentially hundreds of thousands of federal employees have been affected. By February 17, DOGE had posted claims of terminating over 1,000 federal contracts, contributing to a reported $55 billion in savings, as noted by ABC News. Specific breakdowns include $6.5 billion from USAID, $502 million from the Department of Education, and smaller cuts from agencies like the Social Security Administration ($232 million) and General Services Administration ($192 million).
While there is no definitive evidence showing that the Department of Government Efficiency (DOGE) has directly impacted bond yields, an analysis of past events in the bond market and Federal Reserve policy allows for some reasonable conclusions to be drawn. During Fed cycles when fed rate cuts occur, it usually coincides with falling bond yields, but the exact opposite happened. The Fed made its first rate cut in September of 2024 and for the rest of the year going into 2025, the 10-year Treasury yield rose to 4.8% from 3.6% giving the Fed the opposite result of what they expected to happen. The cutting of government jobs and spending by DOGE is already influencing the market. Since the Trump administration took office and DOGE started taking action, the 30-year Treasury yield has decreased from 5% to 4.6% and the 10-year yield went from 4.8 to 4.35%. In summary, a 30-year yield at 4.6% and 10-year at 4.4% signal DOGE is indirectly helping by fostering deficit reduction vibes, boosting debt trust, and calming inflation fears—lowering borrowing costs and supporting growth. If this continues, then Elon once again will achieve the unthinkable, but there is a lot of pressure because if this does not continue and the numbers begin coming up short to balance the budget, then bond yields could begin to spike again.
Despite the amount of negative press he receives, Elon plows forward determined to do more. He still has a lot of work to do in terms of serving our country in the DOGE capacity. The country has been bleeding money for decades and he stepped in with DOGE to amputate bureaucratic cash-burning limbs. The healing process is far from arriving. We are in the stages of salvaging what we can.
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Sources
- Inside Elon Musk's Colossus: xAI's World-Leading AI Supercomputer
- https://budget.house.gov/press-release/fact-check-biden-misleads-on-job-...
- Employment in government rose by 709,000 in 2023 : The Economics Daily: U.S. Bureau of Labor Statistics
- See where and how Biden grew the federal workforce - Government Executive
- The jobs boom is hitting the federal sector, too - Government Executive
- DOGE: Department of Government Efficiency
- https://www.tomshardware.com/desktops/servers/first-in-depth-look-at-elo...
- https://www.techspot.com/news/105149-elon-musk-xai-built-100000-gpu-supe...
- https://fortune.com/2024/09/03/elon-musk-xai-nvidia-colossus/
