In early 2025, the Trump administration launched the Department of Government Efficiency (DOGE), a task force led by Elon Musk and Vivek Ramaswamy aimed at streamlining federal operations through deregulation and workforce reduction[5]. Now, three months into this initiative, we're seeing its economic impact unfold.

The U.S. economy has experienced some turbulence, with GDP growth slowing in the first quarter of 2025[1]. Economic forecasts suggest growth will continue decelerating to about 1.9% for the year, down from 2.8% in 2024[1]. This slowdown coincides with the administration's aggressive government restructuring efforts, which include transferring functions between agencies and hunting for waste in government programs[4].

Unlike the Clinton-era reforms, the Trump administration's efficiency push prioritizes rapid federal workforce cuts and deregulation[3]. The White House officially launched this initiative through an executive order in February, setting the stage for what they call a "deregulatory initiative"[2].

The administration's economic strategy combines these efficiency measures with new tariff policies, creating a substantial reordering of the economic landscape[4]. Some tariffs have already taken effect, while others have been paused or are pending implementation.

Economic experts suggest this combination of deregulation, tax cut extensions, and budget reallocation could create investment opportunities for corporations, particularly benefiting sectors like energy and automotive manufacturing[5]. However, tariffs might cause short-term supply chain disruptions and inflation spikes.

Consumer spending is projected to grow by 2.9% this year before slowing to 1.4% in 2026[4]. Meanwhile, government spending cuts and layoffs are expected to continue over the next few years.

While proponents argue these measures will enhance economic efficiency, critics worry about increased income inequality similar to what occurred during the Reagan administration, with corporate tax cuts potentially leading to more stock buybacks rather than broader economic benefits[5]. As government efficiency efforts continue, the full economic impact remains to be seen.