Elon Musk’s DOGE Sparks Debate as JPMorgan Raises Doubts on Its Feasibility. JPMorgan warned that the Elon Musk-led Department of Government Efficiency will face huge challenges as Congress controls spending.
On Nov. 22, JPMorgan Chase released a report on the newly established Department of Government Efficiency under President-elect Donald Trump and business leaders Elon Musk and Vivek Ramaswamy. The department’s purpose is to streamline federal operations and cut wasteful spending.
“On government efficiency, President-elect Trump is expected to pursue an agenda that advocates for less red tape. Part of this includes a new Department of Government Efficiency (DOGE),” JPMorgan said, adding:
We think the Elon Musk-led department, which looks to cut wasteful government spending, will have a hard time in getting it done.
According to Trump, “Musk and Ramaswamy, said the President earlier this month, “will pave the way” for his administration “to dismantle government bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure federal agencies.” He noted: “Importantly, we will drive out the massive waste and fraud which exists throughout our annual $6.5 trillion dollars of government spending.
Arguing that the Department of Government Efficiency could save the federal government at least $2 trillion in spending, Musk said that urgent action is needed to prevent the U.S. from heading towards bankruptcy due to what he termed “insane government spending.”
“America is actually headed for bankruptcy super fast,” he explained, adding that “immediate action is needed to stop the de facto bankruptcy of America.”
Here’s why DOGE price forecast might face challenges according to JPMorgan:
The bottom line is that Congress controls government spending, and DOGE sits outside of Congress. The department can make all the suggestions it wants, but ultimately it’s the typical 60-vote majority in Congress that makes legislative changes.
“A key concern for investors in 2025 is what parts of the Trump 2.0 agenda will be emphasized and which ones will fade,” the global investment bank concluded.
