The Mathematics of Stupidity: Musk’s Cost-Cutting Experiment is Failing

Elon Musk has built a career on bold moves, sweeping pronouncements, and a relentless drive to streamline and disrupt. In his private companies, that has sometimes led to remarkable innovation. In government, it is leading to something else entirely. Given near-total control over federal cost-cutting in Trump’s second term, Musk has unleashed a wave of layoffs, budget slashes, and restructuring orders under the banner of efficiency. He is promising to save taxpayers billions, perhaps even trillions, by cutting what he sees as dead weight in government.

But as history—and basic arithmetic—suggests, cutting for the sake of cutting is not the same as governing wisely. There is a difference between efficiency and self-inflicted damage, between removing waste and dismantling essential functions. The mathematics of stupidity is simple: when shortsighted cuts create greater costs down the line, they are not savings at all.

One of Musk’s first major moves was to implement mass layoffs across federal agencies, following the same logic he applied at Twitter when he fired eighty percent of the workforce overnight. He has overseen the termination of over one hundred thousand federal employees in a matter of months, forcing departments to justify every remaining position. The immediate effect is a drop in payroll expenses and a round of celebratory headlines about government shrinkage. But the longer-term effects—costs that do not show up immediately on a spreadsheet—are already emerging.

The Federal Aviation Administration lost hundreds of inspectors and air traffic controllers, leading to longer delays, increased safety concerns, and widespread dysfunction. The IRS saw twenty billion dollars cut from its enforcement budget, which Musk and Trump allies claimed would “protect taxpayers” but will, according to the Congressional Budget Office, actually cost the government sixty-six billion dollars in lost revenue. At the Department of Veterans Affairs, a thousand claims processors were laid off just as veterans’ medical cases were surging, leading to backlogs, legal disputes, and overtime costs that will likely exceed whatever was saved on salaries.

If the goal was to cut inefficiency, the result is the exact opposite. Every misstep compounds the next, every layoff introduces a new failure point, every short-term “savings” becomes a long-term expense. It is not just the loss of personnel; it is the hemorrhaging of institutional knowledge, the forced reliance on costly contractors, the lawsuits that will inevitably follow rushed or illegal firings. It is a government running on fewer people but generating more paperwork, spending less on salaries but more on damage control.

The stupidity function at play here is not just about ignorance, though there is plenty of that in assuming government works like a tech startup. It is also about a failure to recognize risk, an inability to update failed strategies, and a blindness to systemic consequences.

One category is ignorance—firing workers and gutting budgets without understanding the actual functions they serve. The assumption that government is simply a collection of redundant bureaucrats pushing paper is a familiar refrain, but the reality is more complex. The FAA’s workforce includes inspectors who keep air travel safe, the VA’s staff includes medical professionals processing life-or-death claims, the IRS’s auditors recover more revenue than they cost. Cutting them does not eliminate inefficiency; it introduces chaos. The only thing worse than bureaucracy is bureaucracy run by overworked skeleton crews trying to fix the damage of bad decisions.

A second category is stupidity in the strict sense—repeating failed strategies even when evidence suggests they don’t work. Musk’s reliance on mass firings follows his disastrous experiment at Twitter, where he fired engineers only to realize the platform could not function without them, then scrambled to rehire many of the same people. He is now running the same playbook in government, apparently unaware that slashing expertise in critical services does not make them more efficient.

Then there is corruption—cost-cutting that does not actually serve the public but redirects resources toward private interests. Musk has positioned his own companies to benefit from federal contracts in the name of efficiency, most notably in automation projects that are being rushed in to replace laid-off employees. The idea of making government more tech-driven sounds good in theory, but when those contracts go to firms with direct ties to the man in charge of cost-cutting, the numbers start to look less like savings and more like self-dealing.

Another stupidity function is deafness—the refusal to listen to those with experience. The career officials who warned that slashing tax enforcement would increase the deficit were ignored. The FAA regulators who cautioned against cutting inspectors in the middle of an aviation staffing crisis were brushed aside. Experts are being fired or driven out, replaced by people with no background in public administration. In a private company, a CEO might be able to impose a vision by sheer force of will. In government, where agencies handle functions from disaster relief to infrastructure to national security, ignoring expertise can be catastrophic.

The most fundamental failure is accepting false premises—in this case, the idea that cutting costs always leads to greater efficiency. There are certainly areas of government where spending is wasteful, where programs are bloated, where bureaucracy could be streamlined. But not every budget reduction is a smart one. Some spending is an investment that prevents far greater costs in the future. Cutting food safety inspectors may save a few million in payroll, but if it leads to an outbreak of foodborne illness, the economic and human costs will be far higher. Defunding disaster response teams may reduce agency spending, but if it results in slower recovery from hurricanes or wildfires, the long-term economic damage will outweigh the short-term savings. The mathematics of stupidity is the failure to recognize that some cuts create more expenses, not fewer.

The last stupidity function is logical fallacy—the belief that because something worked in one context, it must work in another. Musk built his reputation on radical cost-cutting and aggressive restructuring in the private sector. But the incentives and constraints in government are different. A business can make cuts that drive short-term profitability, even at the expense of long-term stability. Government, by contrast, exists to provide services that are often most critical when they are least profitable. The kind of dramatic austerity Musk is pursuing has been tried before, in Kansas’s disastrous tax cuts, in Britain’s failed austerity push, in Flint’s cost-saving decision that led to a water crisis. Every time, the outcome is the same: a short-term appearance of savings followed by higher costs, institutional damage, and public harm.

In the mathematics of stupidity, two minus one can equal zero—or even negative. Cut two dollars worth of value to save one dollar of budget, and everyone ends up poorer. By contrast, the arithmetic of wise governance might mean spending one to gain five—the kind of investment no private business would ever pass up. The challenge, of course, is that the gains of smart governance are often invisible or delayed, while the shrill call for cuts is immediate and loud. It takes foresight and courage to resist the easy applause line of “streamlining” when it really means undermining. It takes leadership to explain to the public that sometimes the cheapest option is not the wisest, and that balanced budgets come from growth and efficiency, not from cutting into the muscle that drives progress.

Elon Musk entered Washington with a reputation for bold thinking. It would be truly bold now to pivot from the simplistic notion that all cuts are good to a more sophisticated understanding of public value. The math is not hard to do, but it requires looking beyond the next quarter’s numbers. In governance, as in life, short-term frugality that sacrifices long-term prosperity is no bargain at all. The sooner our leaders grasp this, the sooner we can stop fixating on the illusion of savings and start achieving the real thing.