The negative economic fallout from Elon Musk’s Department of Government Efficiency (DOGE) is beginning to take hold and could unleash a severe financial crisis across the Washington, DC, Maryland, and Virginia area—home to the federal bureaucracy of Deep State elites. Jobless claims in DC are soaring, a surge in the number of homes and condominiums is hitting the market, and DOGE spending cuts will ricochet through the local economy.
Earlier this week, Dominic Konstam, head of macro strategy at Mizuho, asked: “DoGE-led recession risk?”
The market is focused on a negative economic fallout from Federal spending cuts. The level of potential Federal job losses is too small to derail growth, but overall government spending has been egregiously high in recent years. There has also been excessive job growth in the “government” sectors, including federal, state, and local government, as well as in education and health. If DoGE sets a precedent on jobs and achieves spending cuts that ricochet through the quasi-public sector, it is likely that new economic headwinds will develop.
To answer Konstam’s question above, absolutely!
On Thursday morning, Torsten Slok, chief…
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