DOGE Spending Reduction Plan Struggles to Break Tariff Deadlock, U.S. Economic Recession Risk Concurrent with Global Restructuring
The government efficiency department (DOGE) led by Musk proposed a spending reduction plan, but its radical goals face real resistance.
In the first month of Trump’s administration, government spending increased by 13% year-on-year, while debt interest payments and costs associated with an aging population continue to rise, resulting in DOGE's actual effectiveness falling far short of expectations. This “thrift” strategy cannot fundamentally resolve the structural contradictions in the U.S. economy, especially against the backdrop of the Trump administration's implementation of “reciprocal tariffs,” which has led to a dual paradox in economic policy between “spending cuts” and “trade protection.”
Meanwhile, NVIDIA's market share in China plummeted from 95% to 50%, and Huawei's Ascend chips achieved domestic substitution in the AI field, rendering U.S. technology containment strategies ineffective. Musk had previously warned Trump “not to underestimate China's strength,” but this rational voice was not heeded, and tariff policies and technology blockades have instead accelerated the self-sufficiency process within China's industrial chain.
From a macroeconomic perspective, the U.S. economy is caught in a dual squeeze between “tight monetary policy” and “trade protection.” The DOGE spending reduction plan could lead to the loss of millions of jobs, while tariff policies drive up prices and suppress consumption, further exacerbating the risk of economic recession. Under this “internal and external troubles” scenario, the risk of U.S. economic recession significantly increases. If the DOGE reduction plan and tariff policies overlap, it could result in a 9.4% contraction in GDP.
The U.S. economy is currently under the dual pressure of “internal and external troubles”: internally, it must address debt expansion and inefficient fiscal management, while externally, it faces the reconstruction of the global trade system and pressure from technological competition. Although DOGE's reduction plan may have a short-term effect of stopping the bleeding, it cannot reverse the long-term lack of growth momentum in the U.S. economy.
In the future, the U.S. must seek a balance between spending cuts and expanding openness; otherwise, its global hegemonic position will accelerate its decline.
To learn more about cryptocurrency-related knowledge and first-hand cutting-edge information, follow me, and you won’t get lost in the crypto world!
