Capital Economy, Business and Finance
Here’s a metric by which to judge Elon Musk: US bond yields.
So far Doge’s efforts to cut federal spending and rein in the bloated budget deficit have yet to convince traders on Wall St they should be paying more to hold government debt.
Treasury yields tumbled this week due to weakening growth and assumptions that the Fed will continue to cut rates despite persistent inflation.
Doge’s boast that it’s brought down spending by $55 billion wasn’t a factor – mostly because it’s probably untrue.
Bloomberg has crunched the numbers on Doge’s website and come up with a figure closer to $18 billion. Even if Musk did cut $55 billion, that represents less than 1 per cent of the US’s $7 trillion annual budget and sliver of its $1.8 trillion deficit.
Then there’s the question of the sustainability of the cuts, many of which are already being challenged in court.
Add in the large package of tax cuts announced this week and shrinking the deficit begins to look like a moonshot.
