Reach a new high! The US federal debt surpassed 36 trillion US dollars, and Trump's “Department of Government Efficiency” took over the hot potato

Zhitong Finance learned that according to data from the US Treasury, as the US national debt surpassed 36 trillion US dollars for the first time, a record high, the US will end this year with a large deficit. The US now has an astonishing “milestone” of fiscal deficits every few months. The deficit reached $35 trillion at the end of July and $34 trillion earlier this year. It also helps push the US government to resolve this issue, making it a priority for the next administration as it prepares to take charge of the White House.

In response, Trump initially proposed the idea of establishing an efficiency committee in September to improve the efficiency of the US administration's operations and cut spending. Since then, Musk has posted on his social media platform X calling the committee the “Ministry of Government Efficiency” or “D.O.G.E.”

But in the DOGE plan, the hardest areas to address are popular welfare programs such as Medicare, Medicaid, and Social Security, which have always been the main source of deficits. With no easy solutions, President-elect Trump appointed Elon Musk and Vivek Ramaswamy to head the newly formed Ministry of Government Efficiency to “reduce the size of the federal government.” The new mission will also focus on “the extent of waste, fraud, and abuse,” despite “intense attacks by Washington's vested interests.”

According to the data, US spending on net interest payments in fiscal year 2024 increased by 240 billion US dollars compared to the previous year, already exceeding defense spending and health insurance spending. Over the same period, spending on social security increased by $107 billion and health insurance spending by $25 billion.

Musk and Ramaswamy wrote in an article: “DOGE will help end federal overspending by targeting more than $500 billion in annual federal spending that Congress has not authorized or never planned to use, including from $535 million a year to public broadcasters, $1.5 billion to international organizations, and nearly $300 million to groups such as the American Family Planning Association. Many federal contracts have gone unexamined for years. The recent failure of the Pentagon's seventh consecutive audit shows that the agency's leadership is unaware of how its annual budget of more than $800 billion is being spent.”

Although interest rates are falling due to the Federal Reserve's new easing cycle, cutting spending has never been an easy task, and Trump added $8.4 trillion in US Treasury bonds during his first term (including $4.8 trillion in pandemic relief). Even if the US Department of Justice gets involved in this case, it is expected that a legal battle will unfold over administrative infringement, statutory protections, and the revocation of supervision. Other factors include how the Republican-controlled 119th Congress will handle the restoration of the debt ceiling and the expiration of the Tax Cuts and Jobs Act (Tax Cuts and Jobs Act), as well as plans of other senior officials, such as Russell Vought (Russell Vought), who was nominated as the director of the White House Budget Office, and Scott Bessent (Scott Bessent), who was nominated as the US Treasury Secretary.