A 37-year-old economist who says he bet more than $300k against DOGE on Kalshi explains himself
Business Insider
February 26, 2026
AI-Generated Deep Dive Summary
A 37-year-old economist from the Tax Foundation, Alan Cole, made a bold bet against DOGE (Elon Musk's Department of Government Efficiency) on the prediction market Kalshi, wagering $342,195.63 on whether federal spending in 2025 would exceed that of the fourth quarter of 2024. His bet paid off as federal spending grew by hundreds of billions in 2025, earning him a profit of $470,300—a 37% return. Cole explained his rationale in a Wall Street Journal profile and on X, addressing concerns about the risk involved.
Cole compared his bet to a bond, emphasizing that he was "never worried" about the outcome due to its high probability of success. He noted that federal spending is largely driven by senior programs with built-in increases and interest payments, making it unlikely to decline significantly. By spreading his risk through multiple sub-bets, Cole ensured he would only lose money if federal spending fell by more than $50 billion—an eventuality that did not occur.
The economist also defended his decision to bet such a large sum for a relatively modest return. He argued that most good investment assets offer similar returns relative to principal, and true risks lie in high-risk, high-reward options like out-of-the-money call options. Cole emphasized that even if he had lost the bet, he would not have been left penniless due to his future earnings potential and other assets like his home and retirement savings.
While some may question his gamble, Cole clarified that he holds no animosity toward Elon Musk. He acknowledged Musk's mixed legacy but expressed optimism about his ventures in space exploration (SpaceX) and electric vehicles (Tesla). Cole's story highlights the intersection of economics, innovation, and speculative markets, offering insights into how professionals evaluate risk and reward in uncertain financial environments.
This case is significant for business readers as it demonstrates the potential of prediction markets as tools for investing and hedging. Cole’s approach underscores the importance of strategic risk management and understanding broader economic trends when making high-stakes decisions. His experience also raises questions about the future of speculative betting on government policies and corporate outcomes, particularly in an era of rapid technological and economic change.
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Originally published on Business Insider on 2/26/2026