So now that the Republicans finally, after 20 years, gained the sanction of universal suffrage, they have been active.  One of their main projects has been to shake up the federal bureaucracy.  They have Elon Musk in charge of a semi official post to make government more efficient.

They have sent most all federal employees notice they can quit and receive 6 months pay, without having to work the 6 months.  

It seems to have resulted in tens of thousands of federal employees deciding to quit their posts. It is not clear if they plan on replacing them, and how this would make the government more efficient if they do.  It may be cheaper for a little while, as a younger person, a Trump supporter, gets a job.  But in the long term, it is difficult to see how this could result in a large savings of money, as in time they would receive a similar paycheck.

To save money they are removing the “soft power”, the aid that small countries receive to make them support Washington.  This type of thing would seem to be something they would not be so apt to do, as these small countries receiving aid sometimes prove strategically important.

Nevertheless the national debt is now 36.2 trillion dollars, Musk has suggested he can make government save trillions of dollars by making it smaller.  Thus the logic behind allowing a billionaire to run roughshod over Washington’s bureaucracy.

I don’t think anyone would not agree Washington”s is bloated; we remember the 100 dollar toilet seats, the two hundred dollar screws of the Pentagon budgets we periodically hear about.  Or workers in the bureaucracy receiving 6 digits a year, and not doing any lifting, or producing a commodity.

Many of the people Musk has removed may not be essential, and the government getting smaller to pay off the debt may work.  But we have overlooked something, a thing about the national debt Musk is not attempting to tame.

That national debt is sunk into the bond market, and someone is drawing interest from it.  The money, the state’s debts, are being speculated on. There are investors who have bought ten year bonds, and are speculating on  tax money being collected and spent ten years from now.

Figure 5 percent on a trillion dollars of bonds, that’s 50 billion dollars every 6 months.  The bond’s interest rates are currently at 4,45%,  paid every 6 months, known as a “coupon payment”.  It is easier for me to use 5%, so  bear with me. 

So figure half (which is absurd I know, the total is probably much larger) of the national debt was in these 10 year bonds, that’s about 16 trillion dollars.  Every 6 months our money creates 5%, that’s 16 50 billion dollars.  That’s 800 billion dollars, and in ten years, at every 6 months, a total of $16 trillion has been paid as interest on our bonds that have matured, over a period of 10 years.  

So if you figure the whole 36.2 trillion dollars the debt really is, is in 5% bonds, that’s 32 trillion dollars in interest that has to be paid on the debt in ten years with “coupon payments”. 

According to  Google , in 2024, the interest payments on the national debt totaled  $882 billion.  Our calculation is more than double this, but even if it were half, and in this case half the national debt was not in bonds, rather it was simply paid for by taxes, $882 billion every year for ten years is 8 trillion 82 billion dollars.

Which when you think about it is probably for more money than Musk can save by gutting the bureaucracy.

But if it was twice this, which we calculated first, on a 6 month interest payment (coupon payment), we get a total of about 17.64 trillion dollars in ten years.  

The point of this is to suggest you are going to pay off the debt just by making government smaller, without attending to the source of funding for the government, which is often in bonds, you may not get too far.   Clearly the national debt is speculation on tax dollars being paid to the Treasury, paying interest to investors.

If they want to lower or remove the national debt, the first thing that would have to be done would be to stop issuing bonds.  Straight taxes carry no interest rate.  If you just did that you would save trillions of dollars, and in ten years you would have paid off a large amount of debt, even if you consider Google’s number for the interest on the debt.

Just what they are speculating on is a real question.  The state does not produce commodities that can be sold and make profit, they are not speculating on GM auto production, or Union Pacific railways, which as a joint stock company would pay dividends. 

Rather this is speculation on the debts of the state, paid for by taxes. The surplus value flows in every 6 months as interest on the 10 year note, keeping our bourgeoisie in power.

It would be a remarkable turn of events if Elon Musk reduced the size of the bond issues.  This would result in less surplus value accruing to the bourgeois who buy these bonds, something which would seem the opposite of Musk’s set of prerogatives.  It is just too attractive to speculate on tax money being paid; I mean, they very rarely default.  They could not pay in 2009, and their credit rating fell.  But other than that, it just never happens.  They paid it back eventually, but the bourgeoisie does not like their credit rating being downgraded.  They basically always pay the interest, bonds are pretty much a safe speculation.

Without looking at the source of funding for the state, bonds, reducing the expenditure of the state looks more like a doctrinaire experiment than reality.  These billionaires like Musk are just too sunk into speculating, on the tax money, to give up their cash cow, even to satisfy Elon’s desire for thrift.  

Nicholas Jay Boyes

Milwaukee Wisconsin

American Democratic Republic

2 19 2022

edit 9 19 2025