President Donald Trump enters the fourth month of his second term, and his administration is touting record-breaking cost-cutting achievements, even as the US economy recorded its sharpest downturn in over two years, according to data from the US Commerce Department published Wednesday. The White House claims the Elon Musk-founded Department of Government Efficiency (DOGE) has saved over $100 billion. Still, government data showed that gross domestic product (GDP) contracted at an annualized rate of 0.3% in the first quarter of 2025, which begs the question of whether DOGE has saved any money at all. According to the US Department of Commerce, GDP declined for the first time since 2022, a drop from the previous quarter’s 2.4% growth, far below economists’ projections of a 0.8% expansion. The decline was largely attributed to a ballooning trade deficit, government expenditures, and lower consumer spending. Are DOGE’s savings claims factual? Elon Musk and DOGE have claimed average weekly savings of over $10 billion since the department was officially signed into existence in January. “We’re talking about almost $200 billion and rising fast,” Trump told the BBC on April 23. Back in October 2024, weeks before the US presidential elections, the Tesla CEO pledged to trim $2 trillion from federal spending. That target was later revised to $150 billion by the end of the 2026 fiscal year. DOGE maintains a running tally of its estimated savings on its website, listing the total at $160 billion as of April 20. However, less than 40% of those savings have been itemized. The department claims that around 30% of all savings are currently backed by receipts available online, while others were “unavailable for legal reasons.” The site promises to publish all documentation in a “digestible and transparent manner.” Chamath Palihapitiya, a Canadian-American venture capitalist, said in an April 30 social media post that “the US Government needed to borrow $53B less than forecasted because of money saved by DOGE among other things.” So let me get this straight: 1. Energy prices falling with oil around $60 2. 10Y UST yield falling and is now back to 4.18% 3. The US Government needed to borrow $53B LESS than forecasted because of money saved by DOGE among other things. Not bad. — Chamath Palihapitiya (@chamath) April 29, 2025 On April 28, the US Treasury Department reported its latest borrowing figures, saying it expects to borrow $514 billion in privately held net marketable debt during the current quarter ending in June. This estimate is $391 billion higher than the one issued in February. Still, the department asserted that the figures increased because of a lower beginning-of-quarter cash balance and weaker net cash flows. Excluding those changes, Treasury said its revised borrowing figure was actually $53 billion less than expected, a figure that Palihapitiya and others have tied to the Trump administration’s cost-cutting claims. During the January–March quarter, the federal government borrowed $369 billion, lower than the $815 billion estimated in February. The discrepancy was mainly due to a smaller-than-anticipated end-of-quarter cash balance, though actual borrowing, when adjusted for that factor, was only $2 billion below the original forecast. President Trump: Tariffs are not why the economy is down Over recent months, the Trump administration has imposed new levies on foreign imports, particularly from China, which caused consumers and businesses to rush purchases ahead of rising prices. Some economists believe Trump’s effort to reengineer global trade could lead to inflation and push the US into recession. On the other side, the White House is confident that tariffs will work out for America in the long run. One of the few encouraging numbers in the Commerce Department report was business investment. Gross private domestic investment jumped by 21.9% in the first quarter, its highest level since late 2021, and business spending rose by 9.8%. Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More
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