Prominent economists and market experts are offering sharply contrasting perspectives on the potential economic impact of Elon Musk‘s role in the Department of Government Efficiency (DOGE), highlighting broader debates about the Donald Trump administration’s fiscal policies.
What Happened: Cathie Wood, CEO of Ark Invest popular for leading ARK Innovation ETF ARKK, expressed strong support for the initiative, suggesting on X that DOGE is creating “degrees of freedom to cut tax rates” that could fuel long-term growth.
Wood compared the current moment to Former President Ronald Reagan‘s administration, noting that “the Trump Revolution could dwarf the Reagan Revolution for years.”
Wood linked DOGE’s efforts to broader economic concerns, citing a recent slowdown in the velocity of money as evidence that “monetary policy is tighter than the Fed may understand.” She connected this uncertainty to Walmart Inc.’s WMT recent guidance reduction for 2025 same-store sales growth to 3-4%, approximately 30% below its 2024 performance.
Why It Matters: Former President Barch Obama‘s economic adviser Betsey Stevenson offered a starkly different assessment, characterizing Musk’s efforts as “performance art” designed to distract from larger tax policy changes.
“The Musk cuts are a spectacle saving a few billion and primarily designed to dazzle us into looking away from trillions of dollars in tax cuts,” Stevenson wrote on X.
Economist Justin Wolfers echoed this skepticism, arguing that DOGE’s impact wouldn’t register in macroeconomic data because “pretending you’ve made massive savings is not the same thing as actually making massive savings.” Wolfers suggested a microeconomic analysis shows “Elon is creating huge costs for very little benefit.”
The White House clarified last week that Musk serves as a senior advisor to President Donald Trump rather than an official member of DOGE, amid a lawsuit challenging the scope of his influence as a non-elected, non-Senate-confirmed individual.
Despite criticism, some business voices are pushing for even more aggressive measures. Entrepreneur Kevin O’Leary reportedly suggested Musk “needs to cut 20% more from the federal budget,” adding that “America is ready for seismic change.”
Musk said, “I will do whatever I can.” However, “There are limitations place upon me,” he added.
Read Next:
Image Via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Market News and Data brought to you by Benzinga APIs
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
