“Magic Money Out of Thin Air”: Inside Musk’s Latest DOGE Discovery

TLDR

• Elon Musk claims to have found 14 “magic money computers” in federal departments that can create money “out of thin air”
• These computers exist in Treasury, Defense, Health and Human Services, and State departments
• Musk says government computer systems may be off by 5-10% in tracking funds
• Bitcoin advocate Jameson Lopp responded that “Bitcoin fixes this,” highlighting Bitcoin’s capped supply versus unlimited fiat currency
• Musk indicates most cases (80%) represent waste and incompetence rather than malicious fraud

Elon Musk, the head of the Department of Government Efficiency (DOGE), has made a new claim about federal spending. He says his team found at least 14 “magic money computers” in various government departments. These computers can reportedly send payments and create money from nothing.

Musk shared this information during a March 17 appearance on Senator Ted Cruz’s podcast “Verdict with Ted Cruz.” The tech billionaire explained that these systems exist across several federal departments. They include Treasury, Defense, Health and Human Services, and State.

The DOGE leader challenged common beliefs about government financial systems. “You may think that the government computers all talk to each other, they’re synchronized, they add up what funds are going where, and it’s coherent,” Musk told Cruz. But he claims this isn’t how things work in practice.

According to Musk, these government systems aren’t completely wrong. However, he suggests they may be off by “5% or 10% in some cases.” This discrepancy is what led him to call them “magic money computers” – systems that can “make money out of thin air.”

The discovery came as part of DOGE’s broader cost-cutting mission. Musk was appointed to this role by President Donald Trump to reduce government spending. His team has been reviewing federal expenses across various departments.

Musk’s team also found other concerning patterns. He claims some government departments have more media subscriptions, software licenses, and credit cards than actual employees. In some cases, he reports these items number up to twice the department’s workforce.

The former Tesla CEO doesn’t believe most cases represent deliberate fraud. He estimates about 80% of the issues stem from waste and incompetence rather than malicious schemes. One example he gave involved payments continuing to companies after contracts should have ended.

“We saw a lot of payments going out of Treasury that had no payment code and no explanation for the payment,” Musk explained. He described situations where “that contract was supposed to be shut off, but someone forgot to shut off that contract, and so the company kept getting money.”

Bitcoin advocates quickly responded to Musk’s claims. Jameson Lopp, chief security officer at Bitcoin custody company Casa, commented that “Bitcoin fixes this.” This refers to Bitcoin’s fixed supply of 21 million coins, which contrasts with the potentially unlimited supply of government-issued currency.

Cryptocurrency supporters have long promoted Bitcoin as protection against currency devaluation. Unlike government money that can be created through printing, Bitcoin’s total supply is capped. This feature makes it appealing to those concerned about inflation or government spending.

Musk’s work with DOGE hasn’t been without consequences. His cost-cutting efforts have sparked backlash in some quarters. Tesla facilities around the US have reportedly been vandalized as part of a “Take down Tesla” movement protesting DOGE’s measures.

Magic money computers

The “magic money computers” claim adds to ongoing debates about federal spending oversight. It raises questions about how accurately government systems track and account for taxpayer dollars. These concerns touch on issues of accountability and financial management.

Musk did not provide specific details about how these systems operate. He also didn’t share estimates of how much money might be involved in these discrepancies. Such information would help assess the scale of the problem he describes.

The DOGE team continues its work examining government spending patterns. Their mission focuses on finding inefficiencies and reducing costs across federal departments. This latest claim represents one of several findings Musk has shared since taking on the role.

President Trump appointed Musk to lead DOGE after taking office in January 2025. The department’s creation fulfilled a campaign promise to tackle government waste. Musk, known for his leadership of companies like SpaceX and formerly Tesla, has approached the role with his typical disruptive style.