Elon Musk Criticizes the Federal Reserve’s Efficiency

Elon Musk, the billionaire entrepreneur slated to enhance U.S. government efficiency, has sharply criticized the Federal Reserve. On the social media platform X, he described the central bank as “absurdly overstaffed.” This comment was part of a thread triggered by a post about the Fed’s latest policy decision. Musk, known for his outspoken views, did not provide further details on his statement.

Musk’s Role in Government Efficiency Reform

Musk is set to lead the Department of Government Efficiency (DOGE), an initiative focused on streamlining the U.S. government. Alongside entrepreneur Vivek Ramaswamy, Musk aims to target $2 trillion in spending cuts, which includes reforming the structure of federal agencies like the Federal Reserve. DOGE’s mission is to reduce government inefficiencies, and Musk’s criticism of the Fed’s workforce size aligns with this goal.

Federal Reserve Workforce and Global Comparison

The Federal Reserve, responsible for safeguarding the world’s largest economy, employs approximately 24,000 people. While this number seems significant, it is lower than that of similar institutions. The central banks of Germany, France, and Italy collectively employ more staff than the U.S. Fed. These countries’ central banks are part of the Eurosystem, which includes the European Central Bank and 20 national counterparts.

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Fed’s Funding and Revenue Model

Unlike most federal agencies, the U.S. central bank does not rely on congressional funding. Instead, its revenue primarily comes from operations, such as interest earned on government securities obtained through open market transactions. In typical circumstances, the Fed generates income for the government, contributing approximately $100 billion annually to the Treasury before the interest rate hikes of 2022 reduced its net income.

Trump’s Criticism of the Federal Reserve

The Federal Reserve has been a frequent target of former President Donald Trump, particularly regarding its monetary policy. During his campaign, Trump argued that he should have a say in the setting of interest rates. Recently, he mocked Fed Chair Jerome Powell’s role as “the greatest job in government,” commenting, “you show up once a month and say, ‘Let’s see, flip a coin.’”

Lagarde Defends the ECB’s Commitment

While Powell has not responded directly to Trump’s critique, European Central Bank President Christine Lagarde addressed the matter. In a recent appearance on Bloomberg TV, she invited Trump to observe her team’s work in Frankfurt. “I have thousands of dedicated professionals — economists, legal experts, computer scientists — and I can assure you they work diligently every day, not just once a month,” she said.

Musk’s Government Efficiency Push Gathers Momentum

As Musk prepares to spearhead DOGE, his criticism of the Federal Reserve underscores his broader initiative to cut government spending and improve efficiency. His comments highlight the growing tensions between government institutions and private-sector figures advocating for change.