Elon finds “magic money machines” and “the biggest scam of all time.”

1 CommentCommentary, Efficiency, Government

Background and Musk’s Statements

On March 17, 2025, Musk appeared on Senator Ted Cruz’s podcast, Verdict with Ted Cruz, discussing DOGE’s audit of federal spending. He introduced the term “magic money computers,” describing them as systems within the U.S. government—primarily at the Treasury, but also at departments like Health and Human Services (HHS), State, and Defense (DoD)—that “just send money out of nothing.” Musk claimed there are 14 such systems, issuing payments without proper oversight, totaling trillions annually.

Musk’s focus is on the Treasury’s Payment Automation Manager (PAM) system, which he says handles about $5 trillion in payments yearly—roughly $1 billion per hour. He alleged that DOGE found many payments lacked categorization codes or justifications, functioning as “untraceable blank checks.” On X and in interviews, Musk and supporters have called this a “scam,” suggesting it enables waste, fraud, and unchecked fund distribution, including to nonprofits with minimal auditing.

What Are These “Magic Money Computers”?

Musk’s “magic money computers” aren’t literal cash printers but computer systems that process federal payments. The PAM system, for example, automates disbursements for obligations like Social Security, contractor fees, or grants. Musk’s critique is that these systems issue payments without sufficient tracking or database synchronization, leading to discrepancies. He’s claimed DOGE uncovered contracts that kept paying after they were supposed to end because “someone forgot to shut them off,” alongside unaudited nonprofit payments.

The “fourteen” figure Musk cites is specific—he said most are at Treasury, with others at HHS, State, and DoD—but no public documentation confirms this exact number yet. It might refer to distinct payment nodes or software instances, though details remain vague.

Scale and Implications

Musk claims these systems “fabricate payments and send them worldwide,” pointing to trillions in outflows. The 2025 federal budget is $6–7 trillion, so $5 trillion via PAM aligns with major expenditures (e.g., entitlements, defense). DOGE aims to cut $2 trillion annually, with Musk pegging initial savings—like $100 billion yearly from uncoded payments—as easy wins. Critics on X and in outlets like NPR argue these figures are overstated or misrepresent normal processes, while supporters see it as exposing systemic waste.

The “worldwide” aspect likely covers payments like foreign aid or USAID contracts (which DOGE has targeted), though Musk hasn’t named specific global recipients beyond nonprofits. His March 18, 2025, X post called it “maybe the biggest scam of all time,” fueling the narrative of uncontrolled money flows.