Trump’s Achilles’ Heel
Addison Wiggin / February 13, 2025
“We really have here rule of the bureaucracy as opposed to rule of the people — democracy.”
—Elon Musk on DOGE’s findings to date
February 13, 2025— As dangerous as it is to be critical of Trump’s first hundred days, we have to account for populist whiplash.
Before I write too much, let me preface today’s piece by saying my analysis of populism is largely unpopular. Most folks I discuss politics with in the Grey Swan community think “this time is different” when it comes to MAGA’s second ascension to the White House.
My wife just thinks my obsession with populism is boring.
Is it possible the same people chanting MAGA today will be throwing rocks at the White House tomorrow if inflation doesn’t cool off?
It is.
But as with all things macro, the devil is in the details.
Democrats are still making fools of themselves. Daily. Nightly. Any time they open their mouths.
The party still can’t figure out how they lost in 2024, let alone how to respond to the blistering pace of Trump’s first 100 days.
Their latest trial balloons – that Trump’s plan is causing a “constitutional crisis” or that Musk and DOGE can’t do what they’re doing because he wasn’t elected – are just as stupid as their ill-fated mantra that the 2024 election was about “saving democracy.”
As clueless as they are, the Democratic Party may not have to find a central message more effective than “We ain’t the orange devil guy or [fill in your own hate speech ].” Inflation, avian flu, and good old-fashioned ignorance about how the government actually works might tip the electoral scales for them.
Meanwhile, yesterday’s inflation numbers weren’t pretty: CPI ticked up to 3% in January, PPI rose 0.4%, and eggs—thanks to a bird flu outbreak—are on their way to being more expensive than rent.
But here we are again, watching the Trump administration push tariffs like a miracle cure for the American economy—and a cure for illegal immigrants and the fentanyl crisis.
The problem? Tariffs are just taxes with a flag wrapped around them. They don’t hurt China or Mexican cartels nearly as much as they squeeze American businesses and consumers, which is why Trump quietly let his first tariff war fizzle when inflation ticked up in 2018.
That’s just a fact.
Elon Musk, now moonlighting as Washington’s budget hacker, put it plainly from the Oval Office: “We can’t keep running deficits like this. The government needs to live within its means, just like everyone else.” There’s plenty of red meat for the 24/7 Fox News crowd… scrolls of ludicrous spending programs on foreign boondoggles and specious NGOs.
But slashing $50 million for condoms in Gaza isn’t going to fix a $36 trillion debt pile or do anything about a $2 trillion annual deficit.
Without real spending cuts — big ones — the inflationary hit from tariffs sticks around, and voters will punish Trump just as fast as they elected him.
And that’s the real risk. Voters don’t need to understand economic policy to vote against it. If prices stay high, they’ll toss out tariffs, spending cuts, and any Republican within arm’s reach.
We’ve been tracking this mess since Empire of Debt first hit bookshelves in 2005. Populist movements turn on a dime, and if Trump doesn’t get inflation under control before the 2026 midterms, he might end up on the receiving end of the very backlash that got him elected in the first place.
Meanwhile, we’re as amused as anyone by the laundry list of items that the DOGE team has identified and cut spending on so far. For more on the program’s early success and how it can succeed (or fail) from here, Lau Vegys, writing for our honorary member publication Doug Casey’s Crisis Investing, digs into the details. Enjoy. ~ Addison
I Thought DOGE Would Be a Joke (Turns Out, It’s a Wrecking Ball)
Lau Vegys, Doug Casey’s Crisis Investing
Trump’s reelection sent shockwaves through Washington, but nothing has rattled the establishment more than his creation of the Department of Government Efficiency (DOGE).
Not that anyone’s surprised — government and efficiency go together like a politician and an honest day’s work.
Now, look — I’ve had my reservations about DOGE. And for good reason. After all, it was originally envisioned as a Federal Advisory Committee, meaning it would have no real authority to implement changes directly. Instead, it could only provide recommendations and advice to the President and agencies.
The Grace Commission under Reagan, a similar effort in the 1980s to identify government waste, proved just how difficult—if not impossible—it is to take on Washington’s entrenched bureaucracy in this form.
Note: You can read how the Reagan Revolution was derailed by the Washington political process in less than half a year in a book called The Triumph of Politics by David Stockman, who was the director of the Office of Management and Budget in the Reagan administration. I strongly recommend it.
As I put it in a recent piece:
The upshot is that any recommendation from the DOGE Commission, if it ever sees daylight, will land on the desk of a bureaucrat whose budget it targets. Their first response will be a memo — ten times longer than the original proposal — arguing why it’s absurd, harmful, and impractical. Then it becomes mired in legal challenges, with cases bouncing between courts for years. The legal back-and-forth is endless, and while the White House may occasionally win, each legal battle is an isolated case and requires enormous effort.
Well, now we know — President Trump took DOGE in a different direction than expected (more on that below)… but even setting that aside, after looking deeper and talking to people in the know, I have to admit — I may have underestimated DOGE. More specifically, I underestimated Trump’s efficiency czar, Elon Musk, and his knack for sidestepping the usual bureaucratic traps.
Here’s what I mean…
Just weeks into DOGE’s fight against the Deep State, it’s obvious that Musk’s brainchild operates more like a tech startup — fast, agile, and focused on delivering results. I mean, just look at Team DOGE — instead of bringing in career bureaucrats or Washington insiders, he handpicked young engineers from Silicon Valley, Austin, and even Eastern Europe, all under 30 years old.
One of them, a 24-year-old Estonian coder, developed a fraud-detection algorithm that flagged over $2 billion in illicit transactions for private banks. Another, a 26-year-old AI specialist, helped optimize Tesla’s supply chain automation. Then there’s Luke Farritor, who created an algorithm capable of reading text from carbonized ancient scrolls, winning a $250,000 prize from the Vesuvius Challenge.
Notice a pattern? No Beltway insiders. No political appointees. Just young, hyper-competent tech professionals leveraging AI and automation (to cut through waste faster than any government watchdog ever has).
Another key strategy? Publicity. DOGE isn’t waiting for agencies to act— it’s making its findings public before legal challenges can even be filed. Instead of quietly reporting waste to the White House, DOGE posts its discoveries directly on Musk’s X platform, putting agencies on defense immediately.
Trump’s Masterstroke
It’s all pretty smart. But what’s even smarter is how President Trump and Musk created DOGE in the first place.
Instead of starting from scratch, they took an existing agency already tied to White House authority — the U.S. Digital Service (USDS) — changed its name, rewrote its mission, and turned it into a government wrecking ball.
Here’s a snippet from Trump’s Executive Order 14158, “Establishing and Implementing the President’s Department of Government Efficiency,” issued January 20, 2025:
As you can see, they even kept the same acronym, turning USDS into the “United States DOGE Service.
This was a strategic masterstroke. Had they tried to create DOGE from the ground up, Democrats and career bureaucrats would have blocked its funding immediately. But by repurposing an existing agency, DOGE inherited USDS’s budget and was operational from Day 1 — no need for a separate funding bill.
Beyond the funding, the U.S. Digital Service already had infrastructure in place — offices, employees, and access to federal records, IT systems, and agency infrastructure. That meant DOGE could tap into government data immediately, enforce compliance without new laws, and embed itself in the bureaucracy, making it harder for the deep state to push back.
The other thing President Trump’s order did was set an 18-month timeline for DOGE, expiring on July 4, 2026.
Now, if you’re wondering why that’s a good thing, it’s simple: a limited timeline means the Deep State can’t stall it indefinitely.
Dragging cases through years of bureaucratic delays until reformers give up or a new administration takes over is one of their oldest tricks. But with DOGE set to expire in 18 months, bureaucrats can’t just “wait it out” without serious backlash.
And it’s not just agencies — this affects court battles too. If deep-state operators try to tie DOGE up in court for years, they risk losing by default when DOGE exposes the waste before the case even concludes.
Now, I’m not saying Musk’s team will magically avoid (or win) every legal challenge. In fact, we’ve already seen a federal judge temporarily block Trump from placing USAID employees on leave after DOGE started gutting the agency.
But given all the things working in its favor, DOGE now actually has a shot.
Scrapping the Nonsense
Funny enough, the original USDS was created by none other than Obama in 2014 to “modernize government software.” Hard to imagine a more neutral, technocratic goal…
Under DOGE, though, the newly revamped USDS has been doing a lot more than that.
Alongside their ongoing fight with the bloated mess that is USAID, DOGE has helped cancel over $1 billion in wasteful federal contracts. For instance, the Department of Education scrapped 89 research projects worth $881 million and 29 DEI training grants totaling $101 million, including programs on “histories of oppression” and “privilege.”
A smaller but especially satisfying win for me was the cancellation of funding for a museum exhibit dedicated to Dr. Anthony Fauci (don’t ask me why anyone thought that was a good idea in the first place). That was part of a broader effort that wiped out $182 million in unnecessary administrative spending at the Department of Health and Human Services.
All these efforts add up to real-world results. Just take a look at this—the U.S. Debt Clock recently added a DOGE “clock” to their site, tracking the cuts made since Donald Trump was sworn in 22 days ago. Just hit play—it’s pretty satisfying to watch.
How is DOGE racking up savings this fast? Clearly, it’s not just from canceled DEI contracts.
The U.S. Debt Clock reports that the DOGE clock reflects “real-time savings from reducing government waste, fraud, and abuse”, which lines up with what we’ve been seeing—agencies forced to return unspent funds, contracts getting slashed, and wasteful programs getting shut down.
Now, $83 billion might not seem like much compared to the sheer scale of U.S. debt (which you can also see in the clip above), but it’s a start.
If the current pace holds, DOGE could theoretically save taxpayers $1.38 trillion by January 2026—nearly 70% of Musk’s promised $2 trillion in annual cuts.
Can DOGE really save $1.4 trillion by next year? Honestly, I doubt it. Legal challenges are just beginning, and Democrats and Deep State operatives will fight tooth and nail to keep their gravy train running. But you know what? I’m not worried. Because there’s something else that matters here more than the raw numbers—the exposure. The longer DOGE keeps pulling back the curtain, the harder it gets for the system to justify its waste and corruption. The Deep State can fight all it wants, but once people see where their money is really going, there’s no unseeing it. ~ Lau Vegys, Doug Casey’s Crisis Investing
Regards,
Addison Wiggin,
Grey Swan
P.S. Regarding Jim Rickards’ support of tariffs, our correspondent, Mr. P. offers this alternative critique:
Jim Rickards’ defense of Trump’s tariffs is a masterclass in philosophical gymnastics — twisting free-market rhetoric into a full-throated embrace of economic nationalism, centralized planning, and, ironically, higher taxes on Americans. That’s what tariffs are — taxes on consumers, not some magic wand that forces factories to sprout from the Rust Belt like mushrooms after a rain.
Rickards conveniently sidesteps the real reason America deindustrialized in the first place: not because of some grand economic inevitability but because American oligarchs saw bigger profits in offshoring. They gutted domestic production not for the good of the nation but because squeezing labor costs and maximizing shareholder returns was a far more lucrative game. It worked — better than the oligarchs and their political stooges ever dreamed. And now, after decades of this strategy, Rickards wants us to believe that a tariff-driven revival, implemented by the oligarchs, will bring back prosperity. For whom, exactly?
Certainly not for American workers, who have been repeatedly burned by erratic trade policies that do little more than break trust — both with our allies and the very people they claim to help. Haphazard tariffs create uncertainty, disrupt industries that rely on global supply chains, and invite retaliation that harms businesses. One day, you’re told tariffs will punish China. The next, they’re a bat to browbeat Canada and Mexico into policing America’s borders for us. This is not a strategy — it’s flailing.
And let’s not pretend that laborers will see the fruits of this so-called production boom. Under our current system — by design — gains in productivity don’t translate into higher wages or better conditions for workers. They flow upward into the pockets of the rent-seekers who own the game. Rickards is not championing American labor; he’s just finding a new way to sell protectionism as a gift to the very oligarchs who offshored industry in the first place.
In the end, Rickards’ vision isn’t about making America great again — it’s about ensuring the same power players keep winning under a different set of rules. The rest of us? We’re still playing a rigged game.
If you’re interested in reviewing Jim’s trading strategy regarding the Trump’s tariffs on China that went into effect on Monday, he gives three examples right here.
For the record, it’s not our beat… or any interest of ours, really… to debate the politics of whether Trump is going to make America great again. What we’re interested in is “what” he and DOGE are doing and “how” it’s going to impact our money, the investment markets and ultimately, the (wasted, stolen) taxes we are obligated by law to pay.
Send your comments to addison@greyswanfraternity.com