America adds $6.5B daily despite DOGE rollout

The United States has added $2.1 trillion in new debt since the Department of Government Efficiency (DOGE) was formed on January 20, according to analysis circulating in the latest Kobessi Letter. The figure translates into a staggering $6.5 billion of debt every single day for 326 consecutive days.

The Kobeissi Letter reported the big debt increase and said DOGE was shut down in a controversial move

DOGE cut only small parts of the budget

The Department of Government Efficiency promised to cut spending and save the United States between $1 trillion and $2 trillion when it first came to the federal government.

The department gained significant popularity among the people after it announced its mission to reduce waste, eliminate unnecessary programs, and make the government run more efficiently. However, officials confirmed that the savings were smaller than initially promised. 

DOGE only saved $160 billion to $214 billion, but this represents only a small portion of the federal budget. The department focused on cutting discretionary spending to make the changes appear significant, when in reality, they only affected a very small part of the budget.

DOGE claimed it saved over $60 billion by terminating more than 13,000 government contracts, including IT projects, consulting work, and some large defense projects that had cost the government a significant amount of money.

The department also stated that it canceled 15,000 grants to save $49 billion, terminated hundreds of office leases to add another $100 million in savings, and reduced hiring in some agencies, as well as halted certain DEI programs, which resulted in an additional $1 billion in savings.

Experts say the savings were often exaggerated, counted more than once, or not fully justified. DOGE did not address the largest spending programs, which account for more than half of the government’s total spending, such as Social Security, Medicare, Medicaid, and interest payments on the national debt, so any changes didn’t significantly slow down the debt.

The work that the department did had a minimal effect on the overall debt, as the U.S. continued to borrow billions of dollars every day. This proved that stopping the national debt from growing cannot be achieved with such small efforts. DOGE’s efforts were visible and garnered a lot of attention, but they were mostly symbolic because the outcome differed from what everyone expected.

Mandatory programs and interest rates grow the debt

Analysts predict that the U.S. federal budget for 2025 could reach $7 trillion, primarily due to the government’s obligation to fund mandatory programs. Social Security pays retired people, survivors of deceased workers, and people who cannot work because of disabilities, while Medicare and Medicaid pay for healthcare for elderly people, low-income families, and individuals with disabilities. 

The government must also pay billions of dollars in interest on the money it owes to individuals and institutions that have lent it money through treasury bills, treasury notes, treasury bonds, savings bonds, and government-backed securities. The interest on these loans accumulates annually, and combined with mandatory spending programs, these payments account for more than half of the government’s annual expenditures.

Social Security accounts for approximately 23% of the total budget ($1.6 trillion), Medicare and Medicaid comprise 28% ($2 trillion), and interest payments make up about 14% ($1 trillion).

The remaining 35% of the budget is allocated to defense, discretionary programs, and other operations, which is the focus of DOGE. So, even if the cuts in this 35% of the budget were huge, they could not have as significant an effect on the national debt and on the daily increase, which is approximately $6.5 billion every day.

The aging population in the U.S. continues to grow, which in turn increases the number of people receiving Social Security and Medicare benefits. The cost of healthcare is also going up every year, so Medicare and Medicaid are becoming more expensive. Finally, the interest rates set by the Federal Reserve increase the costs of paying interest on debt, so even a department like DOGE could not have a significant impact. 

President Donald Trump confirmed that DOGE has been shut down, so we now know that if the government wants to make changes to the national debt, it needs to focus on mandatory programs and interest rates.

Get $50 free to trade crypto when you sign up to Bybit now