DOGE Year-End Review: Has Elon Musk's 100-Day Innovation Made an Impact?

An Experiment Ended Prematurely

Federal employees successfully cut 271,000 jobs, a 9% decrease, setting the record for the largest peacetime layoffs. But at the same time, federal total spending did not decrease—instead, it surged from $6.75-7.135 trillion in 2024 to $7.01-7.6 trillion, a net increase of $248 billion to $480 billion. This phenomenon of “slimming down yet gaining weight” is the core contradiction of the DOGE (Department of Government Efficiency) reform.

Initially led by Elon Musk and Vivek Ramaswamy, this “external advisory” agency promised to dismantle government bureaucracy through commercial means, cut redundant regulations, and reduce wasteful spending, ultimately saving $2 trillion to balance the federal budget. The ambitious plan was expected to last until July 2026, giving them 18 months to transform the government. But reality proved far harsher: Musk hurriedly resigned in May after only 130 days of service as a special government employee; by November, DOGE quietly disbanded, still eight months before the original term ended.

This was not an unfinished reform but a complete abandonment. From launch to disappearance, DOGE’s actual lifespan was only about 10 months. When the savings goals became clearly unachievable, legal challenges piled up, and disputes with Trump became public, Musk chose to return to his business empire, leaving behind a gradually disintegrating agency and a host of unresolved issues. This rapid fall from ambition to disillusionment exposed not only strategic missteps but also the fundamental chasm between corporate logic and government operations.

1. The Grand Vision vs. Harsh Reality

DOGE’s reform vision was full of Silicon Valley-style idealism. They planned to use lean management principles to terminate hundreds of billions of dollars in inefficient contracts, shut down redundant facilities, reduce federal employees from about 3.015 million to a leaner size, and replace some bureaucratic functions with AI and automation tools. This methodology has been repeatedly successful in the business world—so why not use it to reform government?

[Chart: Federal Employee Numbers Since 1990]

In January 2025, Musk joined DOGE as a special government employee, with a term set for 130 days. In Silicon Valley, 130 days is enough to launch a prototype, complete a funding round, or even turn around a startup. In the first few months, DOGE demonstrated impressive execution. From January to November, federal employees decreased from 3.015 million to 2.744 million, a net reduction of 271,000 jobs. This was not only the largest peacetime federal layoff since WWII but also remarkably swift. Specific actions included terminating a $290 million refugee facilities contract with the Department of Health and Human Services, cutting $190 million in redundant IT spending at the Treasury, and shutting down hundreds of inefficient agencies and projects, totaling over 29,000 cut actions. DOGE claimed these measures saved approximately $21.4-25 billion, mainly in non-defense federal mandatory spending, decreasing by 22.4% year-over-year.

[Chart: Cumulative Federal Spending]

But the spending data told a completely different story. Overall federal expenditure rose from about $6.75-7.135 trillion in 2024 to about $7.01-7.6 trillion in 2025, an increase of 4%-6%. In just the first 11 months, spending reached $7.6 trillion, an increase of $248 billion compared to the same period. Ironically, some independent analyses suggest that DOGE’s claimed savings may be seriously exaggerated—actual verifiable savings might only be in the tens of billions, or even as low as $30 billion. Due to weakened IRS enforcement, this could lead to at least $350 billion in future tax revenue losses over the next decade, making the so-called “savings” net zero or even negative.

The reality of resistance quickly emerged. Federal spending continued to climb, with mandatory expenditures like Social Security, Medicare, and interest on the national debt unaffected by administrative layoffs. By May, multiple pressures converged. Musk’s relationship with Trump deteriorated, and they publicly clashed. Legal challenges piled up, questioning DOGE’s authority and procedural legality. Tesla’s business also called him back—stock fluctuations, production issues, market competition—all demanding his attention. Most critically, the $2 trillion savings target was clearly impossible to achieve; staying in a doomed project served no benefit to Musk’s personal brand. After completing his 130-day term, Musk announced his return to private enterprise. He did not seek an extension or additional resources, choosing instead to leave decisively. This decision itself was the loudest acknowledgment: transforming government with business methods is far more difficult than he imagined.

2. The Struggles of the Headless Knight: Decline from May to November

After Musk’s departure, DOGE tried to prove it could continue to exist. The White House signaled that the “DOGE spirit” would be integrated into daily government operations, becoming part of the “government lifestyle.” Some former DOGE employees were embedded in various federal agencies to continue pushing layoffs and cost-cutting. Ramaswamy still nominally led the agency, attempting to maintain the reform momentum.

But DOGE without Musk was like a rocket without an engine—its inertia could only last so long. Without the star founder’s halo, the agency’s attention rapidly waned. Without Musk’s direct communication channels with Trump, DOGE’s influence within the government diminished significantly. More importantly, the limitations of reform became increasingly apparent—those large expenditures requiring congressional legislation were beyond DOGE’s reach.

During this period, DOGE’s achievements became harder to define. While some layoffs continued, spending data kept rising. Reports of service disruptions increased. Social Security application delays, regulatory vacuums, and key positions left vacant due to excessive layoffs became common. Criticism grew louder: under the guise of efficiency, DOGE was undermining the government’s fundamental operational capacity. Legal challenges also accumulated, questioning whether many of DOGE’s actions exceeded administrative authority.

By November, several major media outlets reported a fact: DOGE had quietly disbanded. Reuters, TIME, CNN, Newsweek, and others used phrases like “disbanded,” “quietly shut down,” “no longer exists” to describe its fate. No formal dissolution statement, no press conference—DOGE simply disappeared from the public eye. Its original charter, supposed to last until July 2026, was terminated early, with many functions transferred to the Office of Personnel Management or other routine agencies.

This silent ending perhaps speaks more than any failure. Not even a decent farewell—admitting failure is itself awkward. DOGE, once a revolutionary agency promising to change government, became a brief episode most prefer to forget.

3. The Underlying Logic of “Reducing Staff Doesn’t Save Money”

1. The Ironclad Nature of Statutory Spending

The fundamental difference between government finance and business is that over 70% of federal spending is mandatory—these expenditures are mandated by law to grow automatically, influenced by demographics, economic cycles, and interest rate fluctuations, and are completely unaffected by administrative layoffs. Data in 2025 clearly shows this rigidity: social security and Medicare costs increased by about $168 billion, mainly driven by aging populations and inflation adjustments; interest on the debt soared by $71 billion, with debt reaching $36-38.3 trillion, and interest costs even surpassing the defense budget, becoming the largest single federal expenditure.

These rigid costs directly offset all of DOGE’s savings efforts. Even if administrative staff are cut further, social security payments must follow statutory formulas, Medicare subsidies depend on insured populations, and interest on debt must be paid on time to maintain national credit. As an administrative agency, DOGE cannot unilaterally modify welfare programs authorized by Congress, meaning reform is inherently limited to the “peripheral areas” and cannot touch the “core” of spending.

Deeper still, this rigidity stems from constitutional and legislative frameworks. The government is not a profit-driven enterprise but a public institution responsible for social safety nets. When a 65-year-old applies for Social Security, the government cannot refuse to pay just to “optimize costs.” This fundamental difference between government and business explains why commercial thinking hits a wall here.

2. The “Shifting” of Departmental Expenditures

DOGE did achieve some results in areas of discretionary spending. They terminated 5,200 projects and hundreds of billions of dollars in contracts in departments like Health, Education, and the International Development Agency, saving about $37 billion. But these savings were quickly offset by growth in other departments. Defense spending increased due to geopolitical tensions; infrastructure investments expanded under Trump’s priorities; mandatory spending spillover effects further inflated the overall budget.

The result is “partial slimming, overall expansion.” Similar to the common “cost transfer” phenomenon in corporate mergers—cost savings in one department often appear in another. But government lacks the flexible adjustment mechanisms of a business, unable to reallocate resources swiftly. 2025 spending growth also included emergency responses (natural disaster funds increased) and inflation adjustments (CPI up about 3%-4%), external factors that further amplified the “shifting” effect.

Specific data shows DOGE’s savings accounted for only 0.3%-0.5% of total expenditure—far from reversing the overall trend. Mandatory spending increased by $2,210 billion, discretionary spending by $800 billion, and net interest costs by $710 billion in 2025. When you save tens of billions in one pocket but spend hundreds of billions in others, the so-called “efficiency gains” become just a numbers game.

3. Cost Inertia and Friction in Institutional Operations

Layoffs are never costless, especially in government systems. Implementing DOGE’s reforms incurred huge expenses: severance pay, paid leave, re-hiring costs after wrongful dismissals, totaling an estimated $135 billion—far exceeding many of DOGE’s claimed “savings” projects. More covert costs include productivity losses and service disruptions.

Government agencies rely heavily on institutional memory and human networks. When many experienced employees leave, delays in Social Security applications, regulatory vacuums, and decreased policy execution efficiency follow. Although AI and automation are promising, these tools are far from mature enough to fully replace human judgment. Algorithmic governance may be efficient but also introduces new issues like data privacy leaks and algorithmic bias. In shifting from “public service devices” to “data-driven terminals,” the government is losing some intangible but vital elements—legitimacy, social cohesion, and public trust.

A more pragmatic issue is that remaining staff’s overtime costs increase, and outsourcing contracts rise. The government often outsources internal work to private contractors at higher costs. Over the long term, large-scale talent loss could cause “knowledge gaps,” affecting policy continuity and professional expertise accumulation.

Conclusion: Who Lost? Reflecting on the Costs and Boundaries of Reform

Who are the ultimate losers in this clash of ideals and reality? Perhaps first those idealistic reformers—who underestimated the complexity of government operations and wrongly believed that business logic could be directly transplanted into the public sector. Taxpayers might benefit in the short term from partial savings, but long-term risks include service cuts and declining quality. The beneficiaries of public services, especially those relying on Social Security and Medicare, may suffer from service interruptions and reduced efficiency.

Deeper still, the sustainability of the entire system and democratic legitimacy are at stake. When the government is treated as a business to be “optimized,” those values that cannot be measured in numbers—fairness, stability, social cohesion—are quietly eroding. Polls show DOGE’s approval rating hovers around 40%, reflecting a mix of public recognition of efficiency gains and concerns over service disruptions.

But this collision is not without meaning. If DOGE can push Congress to act on core issues like welfare reform and debt control, it could still become a turning point in history. The key is recognizing that government is not a business; efficiency must be balanced with fairness, sustainability, and democratic principles. Businesses can sacrifice everything for profit, but governments must preserve a last line of defense for society’s most vulnerable. This is the most important lesson for business thinking to learn and the deepest insight this clash leaves us.

This report’s data is compiled and edited by WolfDAO. For questions, contact us for updates;

Written by: Nikka / WolfDAO