Elon Musk’s government overhaul goes up in smoke - Bloomberg Editorial Board

Key topics:Musk’s DOGE cuts caused chaos and costly setbacksSavings claims proved inflated and misleadingReal reform needs targeted, tech-driven civil service upgrades.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here. .By The EditorsOne way to hasten a long-delayed home renovation is to set the house on fire. Having helped torch much of the federal bureaucracy, Elon Musk says he plans to move on from his work at the Department of Government Efficiency. Here’s hoping a sounder reform of the civil service can now begin.DOGE began with much hype. It promised some $2 trillion in savings. Staffers vowed to quickly root out fraud and inefficiencies. Often wielding a chainsaw, Musk set about firing federal workers, canceling contracts, gutting programs and dispatching a corps of technology experts without government experience to root around in critical systems.Almost all of it backfired. Sweeping cuts of crucial employees, such as nuclear-weapons experts, had to be reversed. Courts and cabinet secretaries raised objections. Chaos and confusion reigned across the government. Public opinion soured on DOGE, and Musk said he’d step back “significantly” to spend more time on his businesses.As for the savings? DOGE’s own estimates — now whittled down to some $160 billion — have proved to be error-ridden and wildly inflated. One analysis found that the group’s chaos will impose costs of some $135 billion this year, or more than 80% of the supposed savings. Another study found that cuts to the Internal Revenue Service would result in at least $350 billion in forgone revenue over a decade. It’s likely, in other words, that this whole exercise has been a net negative for taxpayers.The shame of it is that Musk & Co. had identified real shortcomings. An overhaul of government technology is badly needed. Agencies really do waste a lot of money. Some fail in their most basic functions. Taxpayers can’t help but notice when astronauts are stranded in space, faulty planes are cleared to fly and the student-loan system becomes all but unworkable. Not least, current government spending is completely unsustainable..Yet Musk misdiagnosed the problems. Out-of-control spending is primarily driven not by fraud but by entitlement programs, which DOGE hasn’t touched. Addressing this crisis-in-the-making is a job for lawmakers.Likewise, most of the bureaucracy’s failures are due not to laziness but to rules and procedures mandated by Congress. Extensive research has described the basic reforms needed: flexibility to upgrade the workforce, better access to the technology and data that workers need to accomplish their goals, fewer burdensome compliance tasks, and more incentives to think creatively.As Musk’s involvement wanes, the priority for policymakers should be focusing on such workaday improvements. The president has said he wants to “keep the best and most productive people.” Appointing Scott Kupor to lead the Office of Personnel Management is a good start. Kupor, managing partner at Andreessen Horowitz, says that he prefers a “surgical” approach to cutting jobs and wants to redesign the recruitment, development and management systems for federal workers. He should be confirmed.Next, Congress needs to update the Civil Service Reform Act to build a workforce suited to the digital era. That means rewarding federal workers for showing initiative and producing measurable results rather than for box-ticking. Staffers who deal directly with the public are often in the best position to see how and why government programs are falling short; they should be empowered to do something about it.Lawmakers also need to cut down on busywork. Agencies are required to submit thousands of labor-intensive reports annually, many of which are completely ignored. The well-meaning Paperwork Reduction Act has paralyzed efforts to design better government services and should be rescinded. The 2,000-page Federal Acquisition Regulation could (let’s say) use some simplifying.Such problems have persisted for decades, despite innumerable efforts at reform. If policymakers are interested in durable changes, they need to start doing things differently. Musk’s exit is a good opportunity to get serious..© 2025 Bloomberg L.P.

Elon Musk’s government overhaul goes up in smoke - Bloomberg Editorial Board

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