Read the full transcript of Larry Kudlow Interviews Elon Musk: Tackling Government Waste and Fraud, March 10, 2025.
Listen to the audio version here:
TRANSCRIPT:
[LARRY KUDLOW:] All right, welcome to the show and a special interview with Mr. Elon Musk, who of course is famed Trump advisor, CEO of Tesla, SpaceX, chair of X Corp. Elon, thank you for doing this. We appreciate it.
[ELON MUSK:] Thanks for having me.
[LARRY KUDLOW:] I want to begin, but among other things, everyone’s attacking you for your position. What are you doing in the government? There was a cyber attack on X today, which shut it down and may have been foreign sourced. It’s a big story. Do you want to give us a moment on that?
[ELON MUSK:] Well, we’re not sure exactly what happened, but there was a massive cyber attack to try to bring down the X system with IP addresses originating in the Ukraine area.
[LARRY KUDLOW:] Oh, well, so that’s your suspicion. Is the website, is the Internet up? Is it up yet?
[ELON MUSK:] It’s up.
[LARRY KUDLOW:] It’s up yet. OK, good. But I just was looking back. Let me see if I get this right. They’re setting fire to various Tesla charging stations near Boston. Shots were fired at a Tesla dealership in Oregon. Various nonviolent. Shots fired. Not a metaphor. Shots fired.
[ELON MUSK:] Yes.
[LARRY KUDLOW:] Downtown New York marching against the Tesla showroom. Your stock is way down. You’ve been criticized left and right. But look on the right side. I mean, why are you doing this?
[ELON MUSK:] Always look on the bright side of life.
[LARRY KUDLOW:] Yes. But besides that. I mean, how’s your day? What motivates you to do this? Was the opera good? It’s tough sledding.
[ELON MUSK:] Yeah, it is tough sledding. But I think we’re doing the right thing here. There’s been a tremendous amount of waste and fraud in the government. When you’re part of the government, you saw a lot of that, and if you look at the Inspector General reports and the Government Accountability Office, there have been many audits that have pointed out that there’s a tremendous amount of waste and fraud in the government.
In fact, there was a report issued by the GAO, the Government Accountability Office, last year. So during the Biden administration, which estimated the federal government fraud to be half a trillion dollars. So just to be clear, that’s not a Trump administration thing, that’s a Biden administration thing.
What we’re trying to do is get that number down to a much smaller figure, save money for the American taxpayer, stop money being spent on things that are, that I think very few taxpayers would agree makes sense. You know, transgender animal surgeries, or why are we spending, why are American tax dollars being spent on this? And the President’s gone through a long list of absurd things. Why are the 20 million people who are definitely dead marked as alive in the social security database? Why were hundreds of millions of dollars of small business administration loans given out to people aged 11 and under, according to the social security? Like these must be some very enterprising eight-year-olds, you know? And some pretty strong 150-year-olds.
[LARRY KUDLOW:] Yes, exactly. As the President said, you know, we have an enormous number of people marked as alive who are 160. He didn’t know the country was that healthy.
Following the Money: How Musk’s Team Works
[LARRY KUDLOW:] So demystify this. How do you do it? How big is your team? Where do you recruit most of them from? And what is it that makes you choose, you know, the Treasury or Social Security or USAID? How does it work? Let the public know, please.
[ELON MUSK:] Right, well, we just basically follow the money. You know, we look at the President’s executive orders, and we also just follow the money.
So we started looking closely at USAID because they were completely violating the President’s executive orders to suspend foreign aid, you know, what’s called foreign aid, but in our view is a lot of corruption. So what we saw there is just a tremendous amount of money being sent to non-governmental organizations. But actually, this, by the way, is I think one of the biggest sources of fraud in the world, is government-funded non-governmental organizations.
This is a gigantic fraud loophole. Where the government can give money to an NGO, and then there are no controls over that NGO. So they’ve given billions of dollars, in fact, we estimate tens of billions of dollars, to NGOs that are essentially scams.
[LARRY KUDLOW:] I don’t want to interrupt, but Secretary of State Rubio just come out, I think he tweeted today, he has accepted over 80% of your recommendations to shut down in USAID.
[ELON MUSK:] Right.
[LARRY KUDLOW:] So your review and analysis was spot on.
[ELON MUSK:] Yes. So I think when people criticize, say, what DOJ is doing, we say, well, which part specifically? Because we put all of the actions of the DOJ team on the DOJ.gov website, and on the DOJ handle on X. So we post the receipts.
So it’s like, this action has been taken, this action has been taken. So when we get criticism, we say like, of what? Which line do you disagree with? Like, which cost saving do you disagree with? And then people usually can’t think of any.
[LARRY KUDLOW:] No. It’s transparent line by line. It’s transparent line by line. Which is quite remarkable.
[ELON MUSK:] Right. And so, and then with respect to the Treasury, for example, the two main recommendations we suggested, which have now been implemented, was that any payments going out of the Treasury, especially the Treasury’s main payment computer, which is called PEM, things like payments account manager or something like that. It’s like almost $5 trillion a year, so about a billion an hour, that the payments be coded with the congressional appropriation and that there be an explanation for the payment.
Very basic stuff. And just doing that, we estimate we’ll save $100 billion a year.
Auditing the System, Not Changing Policy
[LARRY KUDLOW:] You’re not really, let me see if I get this right, particularly with social security, you’re not really changing policy. You’re auditing the fiscal mechanisms to make sure that, you know, from point A gets to point B and that’s where it’s supposed to get to. In some cases, it doesn’t get there. Or in some cases, it may go over there. But that’s, it’s not a policy exercise. You’re not changing laws. You’re just doing what any business would do in a profit and loss audit.
[ELON MUSK:] I think really what we’re adding here is caring and competence. And there’s a massive amount of fraud of basically people submitting social security numbers for social security benefits, unemployment, small business administration loans, and medical, where those are fake social security numbers.
Or they’ve stolen somebody else’s social security number. And we’re trying to put a stop to all of that. And that’s the number which is estimated to be on the order of 10 percent of federal expenditures, which is, you know, half a trillion dollars.
[LARRY KUDLOW:] A huge number. You’re working with the agency heads. You’re working with the cabinet secretaries. I saw Howard Lutnick was on TV yesterday saying you were partnering with them. Is that fair?
[ELON MUSK:] Yeah. What we do is in consultation with the cabinet secretaries and with their departments. So we’re really trying to be sort of, we’ll refer to ourselves as tech support.
You know, we’re really helping the department get a handle on things. Because what actually happens here is you’ve got this sort of vast federal bureaucracy, and then you’ve got a very thin layer on top of the politically appointed officials. And what tends to happen is that the bureaucracy, frankly, is in control.
And they largely ignore the politically appointed people.
[LARRY KUDLOW:] I’m sure you must have seen that. I’ve lived with this twice. I worked for Reagan many years ago, and I worked for Trump in the first term. It’s like a permanent bureaucracy. I might add it’s a permanently liberal bureaucracy.
[ELON MUSK:] Yes, very much so. And it doesn’t, it’s not a bureaucracy that necessarily enforces or implements presidential policy.
[LARRY KUDLOW:] They don’t.
[ELON MUSK:] In fact, they try their best to thwart presidential policy. So the president is the elected representative of the people. And if the president cannot get things implemented as a reflection of the will of the people, then what we have is not a democracy. We have a bureaucracy. We have rule of the bureau, not rule of the people. And that’s what we’re trying to defeat here is the bureaucracy and have rule of the people.
And as you mentioned, the bureaucracy is overwhelmingly Democrat. So Washington, D.C. was 92.5 percent, I believe, voted for Kamala. So this is overwhelmingly a deep blue situation.
The Scale and Scope of the Effort
[LARRY KUDLOW:] How do you pick your next targeted agency or department?
[ELON MUSK:] Well, we’re trying to act broadly across all departments. So it’s not just one department at a time.
[LARRY KUDLOW:] Are you in all of them now? All of them?
[ELON MUSK:] Pretty much. Yes.
[LARRY KUDLOW:] Oh.
[ELON MUSK:] We’re trying to make the government more efficient across the board. So, yeah.
[LARRY KUDLOW:] How big is your team?
[ELON MUSK:] We’re a little over 100 at this point.
[LARRY KUDLOW:] 100. Get to 200. You’re going to get to 200.
[ELON MUSK:] OK.
[LARRY KUDLOW:] And you’re recruiting from where? More or less.
[ELON MUSK:] Basically, it’s software people, you know, information security software people. And finance, you know, it’s basically, yeah, finance and technology. And I mean, frankly, I can’t believe I’m here doing this. It’s kind of bizarre.
But I kind of think that the, you know, we’ve got this enormous federal budget deficit and it’s a $2 trillion deficit. It keeps growing. Our interest payments are higher than our Defense Department budget.
That’s I think was the real wake up call for me, was looking at seeing that the interest payments, the national debt exceeded the Defense Department budget. And that was only growing over time, which meant if we didn’t do something about this, then there won’t be any money for anything. We’ll just be servicing debt.
[LARRY KUDLOW:] And you know how to read an income statement and you know how to read a balance sheet. You’ve had some business experience. I’m kidding. But yeah, you know about this stuff.
[ELON MUSK:] Yeah. I mean, really, I just don’t want America to go bankrupt.
[LARRY KUDLOW:] So it’s a call to action. You’re feeling you’re hearing a call to action.
[ELON MUSK:] Yeah.
[LARRY KUDLOW:] You’ve given up your other stuff. I mean, what do you how are you running your other businesses?
[ELON MUSK:] With great difficulty. Yeah. I mean.
[LARRY KUDLOW:] But there’s no turning back, you’re saying.
[ELON MUSK:] I’m just here trying to make government more efficient, eliminate waste and fraud. And so far, we’re making good progress, actually. So our savings at this point exceed four billion dollars a day. So it’s very significant.
[LARRY KUDLOW:] You think you’ll wind up getting to a trillion dollars?
[ELON MUSK:] Yeah.
[LARRY KUDLOW:] Of savings?
[ELON MUSK:] I mean, unless we’re stopped, we will get to a trillion dollars of savings.
Implementing Real Change, Not Just Reports
[LARRY KUDLOW:] And that stuff can be translated. I mean, we’ve been talking, we had Russell Vogt, the OMB director on earlier, through very rescission authority, empowerment authority. But I believe you said earlier, it’s an audit that will not gather dust on shelves. This is actually going to wind up with real savings, bend the spending baseline down.
[ELON MUSK:] Yeah. There have been many good audits, like I said, done by inspector generals and by government accountability office. And they just haven’t been implemented. Nothing’s been done. I think the GAO identified that there were 17 million dead people in the Social Security database several years ago. It’s now 20 million.
[ELON MUSK:] I mean, I think you can sort of look at this as a complaint minimization optimization. So basically, if the government sends money out to whether it’s wasteful or fraudulent, nobody complains if they receive money.
But they do complain if they don’t receive money. And the people that complain the loudest are the ones receiving the fraudulent money.
[LARRY KUDLOW:] And you’re on it.
[ELON MUSK:] Yeah. I mean, just like I said, the goal here is let’s not have America go bankrupt with waste and fraud. So that’s what I’m here for. And we’re making good progress.
[LARRY KUDLOW:] Yes, you are. You’re going to go another year?
[ELON MUSK:] Yeah, I think so.
[LARRY KUDLOW:] Final report, middle of next year?
[ELON MUSK:] Well, we’re just getting things done as opposed to writing a report. Like I say, reports don’t mean anything. You’ve got to actually take action.
So I mean, the waste report in entitlement spending, which is most of the federal spending is entitlements. So that’s like the big one to eliminate. That’s the sort of half trillion, maybe 600, 700 billion a year.
That is also a mechanism by which the Democrats attract and retain illegal immigrants by essentially paying them to come here and then turning them into voters. So this is why the Democrats are so upset about the situation, because they’re losing, you know, if we turn off this gigantic money magnet for illegal immigrants, then they will leave.
[LARRY KUDLOW:] And they’ll lose voters. You have President Support. He said so again yesterday. He completely supports your operation.
[ELON MUSK:] Yeah, well, thanks. Without the President’s support, we couldn’t make any progress here.
But yeah, I mean, where you’ll see the biggest outcry is from the Democrats who are, they don’t want the waste report to be turned off because it is a gigantic magnet to attract illegal immigrants and have them stay in the country. I mean, you see some of the crazy stuff like where money from FEMA, you know, which is meant, FEMA is an agency that’s meant to take care of Americans in distress. And a bunch of their money was being sent to pay for luxury hotels in New York for illegal immigrants.
And that was happening even after the President was elected, even after he signed the executive order saying that needs to stop. So we actually made sure that that money did stop going because it’s obviously outrageous that American taxpayer money is spent on luxury hotels for illegals. But you have to say, like, why was that being done? It was because the Democrats are trying to import voters, basically.
[LARRY KUDLOW:] Yes. I agree.
[ELON MUSK:] And that’s also why there’s no voter ID needed. In fact, in California and in New York state, you’re not allowed to show voter ID. Doesn’t that seem insane?
[LARRY KUDLOW:] Insane. Yeah. I say that as a New Yorker. It’s insane.
[ELON MUSK:] And it violates the entire Constitution and the principles behind it.
[LARRY KUDLOW:] Yes. Producers are yelling at me to get out. I don’t want to end this interview because it’s too much fun. Can I just ask you one thing? 20 seconds. Nothing to do with Doge. Can you rescue the astronauts?
[ELON MUSK:] Yes, we’re bringing them back in a few weeks. There’s not near enough attention being paid to this.
