Cathie Wood Praises Elon Musk And Calls For Restrictions On Government Spending

ARK Invest CEO Cathie Wood has voiced her support for the newly launched Department of Government Efficiency (DOGE), led by Elon Musk, while calling for tighter controls on government spending in a series of posts on X this past Sunday.

Wood emphasized the idea that government spending is taxation, drawing on her early economic lessons with Arthur Laffer. She argued that government expenditures either lead to immediate tax hikes, burden future generations with debt, or cause inflation, which she described as the most regressive tax of all.

Restricting Expenditure

The conversation gained further momentum after Coinbase CEO Brian Armstrong suggested constitutional amendments to rein in federal spending. Armstrong proposed limiting government expenditure to 10% of GDP and establishing a U.S. sovereign wealth fund that would distribute dividends via budget surpluses directly to citizens.

Wood, who had previously praised Musk and his leadership of DOGE in a CNBC interview, highlighted Musk and his technological expertise as critical to the overall mission of eliminating waste and improving the efficiency of federal operations. DOGE, named after the popular cryptocurrency Dogecoin, is focused on cutting unnecessary regulations and reorganizing government agencies for greater effectiveness.

Cautiously Optimistic

Wood also drew parallels to major economic transformations in U.S. history, particularly during the Reagan era. She reflected on certain policies introduced by Ronald Reagan, which were continued under Bill Clinton, and how they led to tax cuts, robust GDP growth, and a bull market that lasted for nearly two decades. She believes that the current market cycle is only just beginning to unfold.

Looking ahead, Wood is optimistic about the economic potential under President-elect Donald Trump, whose return to the White House could mirror the deregulation and tax-cutting policies of the Reagan administration. She foresees these changes profoundly shifting the political and economic landscape in Washington, potentially paving the way for lower taxes across the board.