Elon Musk’s inflation bombshell: All government spending is taxing Americans

Elon Musk pulled no punches in his latest critique of government spending, tweeting that “excess government spending is what causes inflation!” 

The Tesla and SpaceX CEO argued that “ALL government spending is taxation,” calling it a “very important concept to appreciate.” 

Musk contends that this taxation happens in two ways: directly, through income tax, and indirectly, by increasing the money supply, which leads to inflation.

Musk has been appointed to lead the new “Department of Government Efficiency” (DOGE), a task force aimed at cutting excessive government spending. The brainchild of former President Donald Trump, DOGE was created to identify and eliminate wasteful federal expenditures, and Musk has pledged to make the process both transparent and interactive.

“We will also have a leaderboard for the most insanely dumb spending of your tax dollars,” Musk tweeted, promising “epic” entertainment value as he and the American public rate and rank government waste. 

His plan includes a virtual suggestion box to crowdsource ideas on what to cut, allowing Americans to weigh in on their priorities. Musk emphasized that “all actions of the Department of Government Efficiency will be posted online for maximum transparency.”

Together with former Republican presidential candidate Vivek Ramaswamy, Musk is tasked with slashing waste and restructuring federal agencies. Ramaswamy, who has paused his Senate bid to focus on this role, announced that DOGE will soon begin crowdsourcing examples of government waste and fraud. “Americans voted for drastic government reform, and they deserve to be part of fixing it,” he wrote.

However, DOGE’s role may overlap with existing agencies like the Government Accountability Office (GAO), which also investigates and audits federal spending. It’s unclear how Musk’s initiative will coordinate with the GAO or what impact it might have on his other ventures, including Tesla, SpaceX, Neuralink, and social media platform X.

The stakes are high, as Musk has inherited a mission with a tight timeline and limited fiscal room. Trump has set the deadline for DOGE’s work to conclude by July 4, 2026—marking America’s 250th anniversary—as a symbolic gift to the American people. However, given that two-thirds of federal spending is mandatory for programs like Social Security and Medicare, Musk faces a monumental challenge in finding meaningful savings.