Milton Friedman's Warning to DOGE

The book, which came out in 1984, pinpoints the Iron Triangle of Politics as the main obstacle to cutting government. The triangle's three points reinforce each other to uphold the status quo: the Beneficiaries, the Politicians, and the Bureaucrats.

The "beneficiaries" are interest groups and connected industries that profit off of government programs at the expense of taxpayers. Today's beneficiaries include farmers who receive federal dollars. The new budget bill backed by the Republican Party would extend the Farm Bill, which subsidizes crop purchases. As Friedman said, the people paying the bill are "dispersed." You might not have noticed your share of the $2.1 billion going to prop up corn, soybeans, wheat, and other prices when you paid your 2023 taxes, but the farmers who get that money certainly did.

The "politicians" depicted on the triangle are supposed to be responsive to their constituents but end up serving interest groups instead. But it's the bureaucrats who actually distribute the money.

They grow their power when politicians grow the size of their departments, which generates more spoils to distribute to the beneficiaries. It's a symbiotic relationship all at taxpayer expense.

Bureaucracy tends to "proceed by laws of its own," wrote Friedman, noting that in the half-century between Franklin Delano Roosevelt's New Deal and the Reagan Revolution, the U.S. population "didn't quite double but federal government employees multiplied almost fivefold."

Musk has also observed that a metastasizing bureaucracy "proceeds by laws of its own," stating in a press conference from the Oval Office that "if the people cannot vote and have their will be decided by their elected representatives…then we don't live in a democracy, we live in a bureaucracy."

And, like Friedman, he senses danger if the ballooning of the bureaucratic state isn't reversed. At another press conference, he told attendees that "the overall goal here with the DOGE team is to help address the enormous deficit….If this continues, the country will become de facto bankrupt."

DOGE's strategy is to try breaking through the Iron Triangle by the force of a thousand cuts, looking for little inefficiencies with the mindset of a software engineer. Musk has described his role as "tech support," which is fairly accurate given that the Executive Order that created DOGE actually just rebranded an Obama-era agency called the U.S. Digital Service.

It's a good start. The federal work force should be streamlined, and much of it even automated. But Musk might be repeating some mistakes of the Reagan years.

As Stockman observed, the Reagan Revolution floundered because his team only focused on "easy solutions" like ferreting out "obscure tidbits of spending that could be excised without arousing massive political resistance," which" yielded savings that amounted to rounding errors in a trillion-dollar budget."

To make real progress on cutting spending, the cost reduction must go deeper than tech support could manage on its own. Friedman knew that the path to shrinking the federal government began with abolishing federal agencies. In his viral clip, he lists the departments of Housing and Urban Development, Agriculture, Commerce, and Education as ones to put on the chopping block. 

Trump has already shut down the Department of Education…kind of. His executive order directs the Education secretary to draw up plans to eliminate or shift some spending to other departments. It keeps major spending like federal student loans intact, and a total dismantling will require Congress to act.

The Trump administration has made severe cuts to the U.S. Agency for International Development (USAID), and it defunded the Consumer Financial Protection Bureau, the brainchild of Elizabeth Warren, which made access to credit and banking more difficult for low-income customers. DOGE also enticed 75,000 federal workers to resign. But many of these cost-cutting initiatives have been challenged in court. Truly eliminating federal agencies requires congressional action.

Because Trump holds only slim congressional majorities and didn't win on a platform to slash government, he won't be able to eliminate entire federal departments like Commerce or Agriculture.

But what would happen if the Trump administration had really followed the Friedman blueprint, learned from the shortcomings of the Reagan Revolution, and created a political movement capable of pressuring Congress to finally start permanently eliminating entire agencies?

Friedman says it would actually make the federal government function better by narrowly focusing on providing what state governments and the private sector can't.

"One function of government is to protect the country against foreign enemies—national defense," says Friedman. "A second function of government, and one which it performs very, very badly, is to protect the individual citizen against abuse and coercion by other citizens….I believe that the government performs that function very ineffectively because it's doing so many things that it has no business doing."

Earlier this year, Musk wielded a chainsaw gifted to him by Argentina's libertarian president, Javier Milei, who more closely followed the Friedman blueprint by targeting the beneficiaries and the bureaucracy, which he calls "La Casta."

In Argentina, it took massive poverty and triple-digit inflation to spark a real libertarian movement that now has a chance of overthrowing the tyranny of the status quo.

We don't want to wait for things to get that bad. 

Musk praised Milei's approach at an event in Buenos Aires co-hosted by the libertarian Cato Institute.

"I think governments around the world should be actively deleting regulations, questioning whether departments should exist," said Musk. "Obviously President Milei seems to be doing a fantastic job on this front."

Fantastic indeed. But how can the Iron Triangle be overcome in the American system?

DOGE itself can't legally delete entire departments. DOGE's website claimed $140 billion in cuts out of its $2 trillion goal as of early April 2025.

But it hasn't provided full documentation, and various media and open source analyses have ball-parked DOGE's total savings as more in the $2 billion to $7 billion range.

Either way, DOGE isn't anywhere close to reaching its goal of cutting $2 trillion in government spending, or almost 30 percent of the $7 trillion annual budget. The Congressional Budget Office found the deficit grew 5 percent in February compared to the previous year despite DOGE's early cuts. Meanwhile, the Republican majority passed a budget projected that would add $3.4 trillion to our $28.8 trillion debt.

And we haven't even talked about Social Security and Medicare, which are the major drivers of debt, and which Trump has promised not to touch.

As Stockman came to realize, this is a bipartisan problem.

"There isn't a difference [between the parties] when it comes to the debt," he said on an episode of Reason's Just Asking Questions. "How in the world can we keep adding $1 trillion to our public debt every three months? How are we going to get away with basically enslaving the next generation of Americans with debt?"