So, you've probably seen the headlines or the spicy threads on X about Elon Musk and the whole "defund the poor" controversy. It sounds like something out of a cyberpunk villain’s monologue, doesn't it? But if we’re being honest, the reality is a lot messier, weirder, and—frankly—more bureaucratic than a simple "good vs. evil" narrative.
People are freaking out for a reason. Musk, recently worth a staggering $713 billion, hasn't actually used the literal phrase "defund the poor" as a policy slogan. However, his actions through the Department of Government Efficiency (DOGE) and his public crusade against "improper payments" have led critics to argue that his version of "efficiency" is just a polite way to gut the safety net.
Whether he’s a visionary trying to save the U.S. from bankruptcy or a billionaire disconnected from the struggle of paying rent, the impact of his 2025-2026 political stint is finally coming into focus.
The DOGE Experiment: Efficiency or Erasure?
When Elon Musk and Vivek Ramaswamy took the helm of DOGE under the second Trump administration, they promised to hack away $2 trillion in federal waste. That's a massive number. It’s also, as it turns out, really hard to do without hitting people who have the least.
Musk’s strategy wasn't exactly subtle. He looked at the federal budget like a bloated Tesla production line that needed "first principles" thinking. He frequently pointed to the $236 billion in "improper payments" reported by the government as a primary target. Sounds reasonable, right? Who wants the government to send checks to the wrong people?
The problem is the definition of "improper." In the world of federal accounting, an improper payment isn't always fraud. Often, it's just a clerical error—like a mother forgetting to attach a specific form to her Earned Income Tax Credit (EITC) application. By aggressively targeting these errors, DOGE effectively created a "paperwork wall" that made it harder for low-income families to access their benefits.
The Real-World Fallout
In late 2025, reports started trickling in from across the country.
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- Federal Employee Layoffs: Thousands of workers—many in Social Security and Medicaid processing—were let go in what Musk called "hardcore" restructuring.
- Service Delays: Without those workers, wait times for disability claims and housing assistance skyrocketed.
- Contract Terminations: Small businesses and local service providers that relied on federal grants saw their funding vanish overnight as DOGE "paused" thousands of programs for review.
A former government worker, who had been with the feds for 10 years, shared a story on YouTube about getting a termination letter on a Saturday. They were told they were a "poor performer" despite a decade of clean reviews. This kind of "move fast and break things" approach might work for rockets, but when you're dealing with human lives and food stamps, things get broken that can't be fixed with a software patch.
The Myth of "Universal High Income"
While he was slashing budgets, Musk was also tweeting about a future where "work is optional" and there is "no poverty." He calls it Universal High Income.
Honestly, it sounds great on paper. Musk argues that AI and robotics will create so much abundance that the cost of goods and services will drop to basically zero. In December 2025, he even told Ray Dalio that there would be "no need to save money" because everyone would be wealthy.
But there's a massive gap between that Sci-Fi future and the 2026 reality. Critics, including Nobel laureate Paul Nurse and researchers at the Economic Policy Institute, have pointed out the obvious: you can't eat a future robot-generated salad today. If you cut the programs that keep people alive now based on a promise of AI-driven abundance tomorrow, you're essentially gambling with the survival of the working class.
Why the "Defund" Label Stuck
The phrase "Elon Musk defund the poor" became a rallying cry for his detractors because of the perceived hypocrisy in where the "efficiency" hammer fell.
DOGE was quick to flag a $611,000 study on microaggressions or NIH grants for niche research. But as many pointed out, these are rounding errors in a $7 trillion budget. Meanwhile, the roughly $150 billion in evaded taxes by the ultra-wealthy—the "tax gap"—wasn't exactly a top priority for the DOGE team.
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When you spend $250 million to help get a president elected and then get a job where you can influence the funding of agencies that regulate your own companies (Tesla, SpaceX, X), people are going to be skeptical. It feels less like "efficiency" and more like "consolidation of power."
The 2025 Reality Check
By the end of 2025, the data started to betray the hype. Despite the high-profile cuts and the firing of thousands of federal "bureaucrats," overall government spending actually increased by about $248 billion.
Why? Because federal spending is driven by "autopilot" programs like Social Security and Medicare, which Musk and Ramaswamy ultimately realized they couldn't touch without an act of Congress—or a massive political revolt. They cut the "small" stuff that helped the poor, but the giant gears of the state kept turning, fueled by debt and structural obligations.
What This Actually Means for You
If you're trying to navigate this era of "efficiency," the vibes are definitely "every man for himself." Musk’s influence on the government has shifted the focus from social support to technological solutionism.
Basically, the message is: the government isn't coming to help you, but a robot might eventually make your life cheaper.
Actionable Insights for a "DOGE" Economy
- Don't Count on Automation Dividends Yet: Musk is right that AI is changing the world, but "Universal High Income" is nowhere near a reality. Keep your day job and keep your skills updated.
- Audit Your Own Efficiency: In a political climate where social nets are fraying, personal financial resilience is everything. Look at your own "improper payments"—subscriptions you don't use, high-interest debt, or wasted energy costs.
- Stay Informed on Local vs. Federal: Interestingly, some local governments are pushing back. In Montgomery County, Maryland, they started their own "efficiency" office that focuses on cutting red tape for residents through AI chatbots without the mass layoffs seen at the federal level.
- Watch the Regulation Shift: If you’re a business owner or investor, pay attention to which agencies are being "gutted." Deregulation creates opportunities in some sectors (like energy and aerospace) but might increase risk in others (like consumer protection and environment).
Elon Musk isn't necessarily trying to "make people poor" in his own mind. He likely believes he's the hero of the story, trimming the fat so the American ship doesn't sink. But when the "fat" being trimmed is the literal food on someone's table, it’s easy to see why the "defund the poor" label has stuck so hard.
The experiment is far from over, but the lesson of 2025 is clear: "running the government like a business" is a lot harder when the "customers" are citizens with rights, not just lines on a spreadsheet.
To stay ahead of how these policy shifts affect your taxes and benefits, you should check the latest 2026 IRS guidelines on the Earned Income Tax Credit, as the documentation requirements have become significantly more stringent under recent DOGE-influenced audits.