When Will Elon Take a Wrecking Ball and a Sledgehammer to the Military-Industrial Complex?
by John Lawrence
I'm still waiting. So far Elon's wrecking ball has saved small potatoes. The really big fraud, waste and abuse is in the Defense Department. The United States spends more on defense than the next 9 countries combined. In 2024 the US spent over a trillion dollars just on interest on the Federal debt. The current defense budget is $895 billion. The US budget for intelligence agencies in 2023 was $99.6 billion which was a nearly $10 billion increase from 2022. U.S. programs to operate and modernize nuclear forces would cost $756 billion over the next 10 years. So when you add it all up, the US spends well over a trillion dollars a year on defense/offense. In 2023 The federal government spent 38.0% more than it collected resulting in a $1.7 trillion deficit. In 2024 the US added $2 trillion to the national debt. The last trillion was added just 4 months after the previous trillion. In the new Trump/Musk era, in which the US will purportedly retreat from being a globally connected power, there are much cost savings to be had by cutting all these budgets down to size. China's total military spending for 2024 has been estimated at US $471 billion, roughly half the US military budget. The US could bring it's defense/offense budget down to roughly that size and still spend more money than any other country.
The question is couldn't the US slash its military budget and still be a world power? The only other alternative to cutting US expenditures down to the size of US revenues is to cut spending on social security and medicare. The federal government spent $1.35 trillion on Social Security in fiscal year 2023. This accounted for 22% of the total federal budget. In 2023, the federal government spent about $848.2 billion on Medicare. Medicaid is financed jointly by the federal government and the states. In 2022, the federal government covered 71 percent of the program's cost, spending $592 billion. So the Trump/Musk cost cutting regime is likely to focus on Medicaid, which is the health care program that mostly helps poor and vulnerable people. The federal government collected nearly $4.5 trillion in revenue in FY 2023 and spent almost $6.2 trillion. So the US government was $1.7 trillion short! In 2024 $2 trillion was added to the national debt, and currently the US spends $882 billion just on interest on the national debt, about the same amount as the nominal defense budget and more than was spent on Medicare!
In the first Trump presidency the national debt rose by almost $7.8 trillion mainly due to tax cuts for the rich. Now that Trump wants the debt ceiling abolished, he will probably want to use the same playbook to give more humungus tax cuts to the rich. This will drive up the national debt, which now stands at $36 trillion to even higher nose bleeding heights. Meanwhile, Musk will find that his cost cutting measures can only come to fruition by raising payroll taxes, the money paid into the social security fund by working people. He could also raise the cap on social security payments which now stands at $176,100. So all those making more than this cap pay nothing on income above it. However, since this would affect rich people, it may not be raised except in the case that there would be all kinds of carve outs or exceptions for the very rich. In other words the working rich, who receive a salary, might have to pay more. What we are not likely to see is any kind of taxes raised on stock sales or carried interest, in other words money that is made by the very rich.
Medicaid will probably be the first target of Musk cost cutting. Many red states have already opted out of Medicaid expansion which was included in Obamacare. The Kaiser Commission on Medicaid and the Uninsured identified 21 states that, as of July 2013, were not proceeding with Medicaid expansion and 6 states in which a decision had not been made. Forty-six percent of uninsured adults in the United States who could become eligible for coverage live in a state that is not planning to expand Medicaid. In the south, the region with the highest rates of uninsured, more than 80% of potentially eligible adults will not gain coverage because of decisions to opt out. Trump/Musk will probably want to leave Medicaid totally to the states leaving Federal funding off the hook altogether. Many of these states will then totally opt out of any Medicaid responsibilities whatsoever.
