Lincoln Knew Something About Government We Keep Forgetting...

Dear Friends,

Elon Musk might be a genius, but apparently he skipped Econ 101.

In my latest Bloomberg Opinion piece, I wrote about something Abraham Lincoln understood back in 1854—long before Twitter, Dogecoin, or SpaceX: There are things that only the government can do.

Lincoln called it plainly: the role of government is to do the things people need but can’t do well—or at all—by themselves. When the benefits of something spill over to everyone—not just the people paying for it—you can’t count on the free market to deliver enough. Lincoln’s government didn’t just fight a war—it built the Transcontinental Railroad, launched land-grant colleges, and opened up farmland to settlers. Why? Because those things had what economists call positive externalities—benefits that go beyond the people directly involved.

Fast forward to today, and DOGE is gutting programs that fall squarely into that same category: public goods. Think the National Weather Service, which costs $5 billion but creates more than $30 billion in value every year. That’s true for schools. It’s true for roads. It’s definitely true for national defense. (No, Citigroup is not going to raise its own tank division if New Jersey gets invaded.)

It’s also true for one of the most misunderstood public goods of all: scientific research.

Private companies will fund applied science when there’s a clear profit at the end of the rainbow. But pure research? The kind that asks, What’s inside a cell? How does gravity really work? What happens if we smash these atoms together? That doesn’t get funded by markets—because there’s no easy way to charge people for E=mc².

This is the kind of work that DOGE cuts threaten. Not just by stripping funding, but by disrupting the expertise and infrastructure required to run these programs well.

Public goods exist because markets can’t provide them. That’s not waste. That’s literally why we have a government in the first place.

So when Musk and DOGE slash budgets under the banner of cutting “waste, fraud, and abuse,” they’re not just trimming fat. They’re undercutting some of the few things that only public institutions can deliver—and doing so in ways that destroy institutional expertise, not just dollars.

Here is my question to you today: What’s the real cost of confusing government waste with government purpose, and if we defund public goods, who picks up the pieces when we need them most?

– Gautam

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