Elon Raw D.O.G.E.s Washington

Earlier this year, I attempted to set up an interview with a high-ranking congressional staffer. I wanted to pick his brain about D.O.G.E. and Elon Musk's chances of making meaningful cuts to the federal government. But putting that together was a lot of work. So instead, I got high and wrote about UFOs in New Jersey.

Click here for Kalshi's D.O.G.E. markets.

In hindsight, this was for the best, because I doubt that even the most plugged in Congressional staffer would have predicted that Elon would hire a 19-year-old kid named "Big Balls" to f**k around with Treasury Department payment systems while still finding time to call Tom Hanks a pedophile.

The point being, Elon is surprising a lot of people. But will his surprises make a lasting impact on federal spending, or just a fleeting impact on our dopamine receptors?

Let's take a look at what traders think of Elon's efforts thus far.

The federal budget is nearly $7 trillion dollars, so there's lots of pork to cut from all sorts of places: Defense, Agriculture, Transportation, etc.

That’s why it was so surprising that Musk’s first target out of the gate was USAID. After all, it's one of the government's most well-intentioned agencies... or so I thought!

Turns out, this supposedly humanitarian-focused project was nothing more than a front to push gay comic books on kids in Peru. Who knew?

But despite Elon's claim that USAID is "a criminal organization" that gave $800 trillion in free rubbers to ISIS (or something like that), traders still think there's only a 46% chance it will be eliminated completely.

That's a lot higher than people would have guessed back in November, but far from a sure thing. So I guess we're just going to have to wait and see what happens, which is not what you want to hear if your next round of antiretroviral meds hangs in the balance. But here we are.

While the chance of USAID being eliminated might be less than a coin flip, our traders think some agencies are sure to get the axe.

Currently, our forecast predicts 17.9 agencies will be cut between now and July 4th, 2026.

Among the agencies that could be eliminated, few have a bigger target on its back than the Department of Education.

Conservatives have been deriding the agency since it was created in 1979. So it should come as no surprise that D.O.G.E. has already terminated nearly $1bn in US Department of Education contracts.

That said, traders think the chances that the Department of Education will be eliminated this year are only 34%.

As mentioned above, in late 2024 and early 2025, there was a lot of skepticism surrounding D.O.G.E.'s ability to actually get things done, which explains why traders initially forecast only 100,000 government jobs would be cut.

But since Trump's inauguration, that number has risen sharply. In the past week alone, the forecast jumped by 100,000.

As more and more workers accept buyouts or are laid off, traders are now predicting just under 300,000 government employees will be cut.

Elon is clearly making his presence felt within the federal government. But at the end of the day, how much of an impact is D.O.G.E. making on federal spending?

For weeks traders were forecasting around $20 billion in cuts, but that number recently jumped to $73 billion.

Obviously, $73 billion is nothing to sneeze at. But it's still far short of the original $2 trillion goal put forward by Musk.

In all fairness, the $2 trillion goal was later walked back as a "best case" scenario. But it's still well short of the revised $1 trillion target.Getting anywhere near that target is going to be difficult, if not impossible, without military cuts. And traders think there's only a 28% chance that will happen in 2025.

Of course, it's possible our traders are underestimating Elon. And underestimating Musk has often turned out to be a very bad bet.

But perhaps Elon Musk is overestimating his ability to cut through government waste by screaming "treason" and "fraud" on X, since federal judges have lifetime appointments, as opposed to Senators who are afraid of a primary challenge.

But we'll soon find out.

Speaking of screaming at people on X...

We'll end on a non-D.O.G.E. market.

Over the years, many of Elon's detractors have labeled him a bully.

On the one hand, business and politics are contact sports. It's not like he's running a children's soccer league.

On the other hand, no matter how busy Elon gets, he does always seem to find time to pick on the nerdy gay kid, which is suspect.

Luckily, in this case, the nerdy gay kid is the same guy who is going to destroy all the mid-wit jobs (like mine), so even the biggest sh*t lib doesn't seem to mind when Elon shoves him into a locker.

Musk's latest needling comes in the form of a $97.4 billion low-ball buyout offer for OpenAI. This is in addition to Musk's ongoing lawsuit to block Altman from turning OpenAI into a for-profit entity.

What do Kalshi traders make of this? Despite some movement in our 'Sam Altman at OpenAI market,' it looks like there's only a 1 in 4 chance the CEO will leave this year.

And with Musk’s offer expiring May 10th, there’s probably a better chance that if Altman leaves, it's because he's been replaced by an AI CEO rather than run out of town by Elon.

Follow Kalshi on X: @KalshiFollow Terry Oldreal on X: @realoldterry

The opinions and perspectives presented in this article belong solely to the author, who is using a pseudonym and cannot trade on Kalshi. This is not financial advice. Trading on Kalshi involves risk and may not be appropriate for all. Members risk losing their cost to enter any transaction, including fees. You should carefully consider whether trading on Kalshi is appropriate for you in light of your investment experience and financial resources. Any trading decisions you make are solely your responsibility and at your own risk. Information is provided for convenience only on an "AS IS" basis. Past performance is not necessarily indicative of future results. Kalshi is subject to U.S. regulatory oversight by the CFTC.