Would the DOGE Dividend be worth it?

March 18, 2025 • Time:4 minutes

There's been talk from DOGE about inefficient government and fears of mass firings. I don't agree with the scorched earth approach, but we need to think in a non-partisan way about making government more efficient.

Elon Musk has taken his first pass and claimed there are at least $55B in savings, which he’d like to remit back to taxpayers in the form of a dividend. Hey Grok, what's the DOGE dividend going to be? My rough calculations are $55B saved / 350M population = $160 / person ($640 for family of 4). Not bad for a month or two of work. At $17B documented savings though, it's more like $50 / person.

But perhaps we need to question any numbers DOGE puts out.

There are already numerous calculation errors and it seems that DOGE doesn’t even know how to count and don't understand the contracts. From Twitter: @electricfuture:

The next 3 biggest ticket items are all USAID contracts listed as $655M each, so $2B total. Wow, pretty big. Wait, these are IDVs, not contracts. $655M is the entire set-aside, being triple counted. In the first 5 years, only $73M was awarded, and only 2 years remain. So we're down to $6.5B in savings, and an alarming trend emerges: @DOGE does not seem to understand how the government contracts they are canceling work. The savings they are claiming are not annual, but rather hypothetical if we spent every unobligated penny. And more importantly, they are just getting it wrong, with alarming consistency. These numbers are erroneous. This "select group of geniuses" has not double checked even the LARGEST items accounting for the bulk of their claimed savings. This is a sad, pathetic farce.

Here's the next biggest item: an IT services contract for the Social Security Administration worth $1B. That's a lot of savings! Well, again, this contract spanned 6 years. 80% has already been spent. Ah well, more like $240M in savings spread over the next 3 years. $80M/year. In 2023, this contract funded 1000 FTEs working $100/hr. Did we need 1000 SWEs working on SSA infrastructure? Probably not - these could be valid savings (disclaimer: no idea what they actually did). But worth noting that these cuts will impact many private sector jobs as well. And if anyone is curious, there are currently 17 lines that say "SEE FPDS" rather than the savings amount, I guess because their automated scraping failed. I did it manually and it took roughly ~10 minutes. But that's too much to ask of super geniuses working 120 hours/week!

And it's worse than it seems. DOGE has blind focus on cost over value which means Elon has recently set his sights on deleting the CFPB. But it saved the country $17B in unnecessary overdraft fees, and we've saved ~$800M from deleting them - terrible ROI.

Maybe now is the right time to remind everyone that the only "savings" that seems to actually be true is the ~10% job cuts in the Federal government (though it’s not even clear the US federal government is that inefficient). And while layoffs sometimes a necessary thing, as any tech company founder will often claim, the method by which they've approached them feels extremely haphazard and not data-driven at all. Some examples I've seen:

  • Firing employees simply because they've been at the company < 2 years rather than pushing for early retirement for highly tenured employees that likely earn more and can contribute less

  • Firing employees simply because they are considered "probationary" even though the term also applies to those that were recently promoted

  • Mass firings that seem to be related to oversight of companies that key government officials own or manage

With ~10% layoffs, we'll end up saving over $40B a year, which is definitely not nothing, but only accounts for ~$100 / person / year in cost savings. Meanwhile, this move energizes not just a directly affected 200K block of former federal workers but also a newly fearful 2.2M (who have had to fear for their job for the first time likely ever) into potentially voting for change. Is it worth it?