Man Bets Life Savings on Elon Musk Failing to Cut Government Spending

Alan Cole, an ivy league tax economist, cashed out big after Musk fell short of promised $2 trillion in cuts.

Feb. 26, 2026 at 5:05pm

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A man named Alan Cole bet his entire life savings of $342,195.63 on a prediction market that Elon Musk would fail to cut federal government spending below 2024 levels during his short stint in Washington. When Musk fell far short of his promised $2 trillion in cuts, Cole ended up profiting around 37% on his risky bet, cashing out $470,300.

Why it matters

This case highlights the high-stakes and controversial nature of prediction markets, where some participants are suspected of exploiting insider information for short-term gains. While Cole's bet may have been unconventional, it stands in contrast to more egregious incidents of alleged market manipulation.

The details

Cole, an ivy league-educated tax economist, placed the bet in 2025 on the prediction market Kalshi. He wagered that if Musk and his "DOGE boys" failed to cut federal spending in 2025 below 2024 levels, he would receive a huge payout. When the government's final 2025 spending tally came in $66 billion above Cole's threshold, Kalshi paid out $470,300 to Cole, a profit of around 37% on his initial $342,195.63 bet.

  • Cole placed the bet in 2025.
  • The federal government's final 2025 spending tally was released on February 20, 2026.

The players

Alan Cole

An ivy league-educated tax economist who bet his entire $342,195.63 life savings that Elon Musk would fail to cut federal government spending as promised.

Elon Musk

The billionaire entrepreneur who briefly served in Washington and promised to cut $2 trillion in federal spending, but ultimately fell far short of that goal.

Kalshi

A prediction market platform where Cole placed his high-stakes bet against Musk's ability to reduce government spending.

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What they’re saying

“The virtue of the matching market is that you can take the good side of a bad bet — someone else's bad bet.”

— Alan Cole, Tax Economist (Wall Street Journal)

What’s next

The details of Cole's bet and payout will likely continue to be scrutinized, as prediction markets face ongoing concerns about potential insider trading and market manipulation.

The takeaway

While Cole's unconventional bet may have paid off handsomely, it highlights the high-risk, high-reward nature of prediction markets, where some participants are suspected of exploiting insider knowledge for personal gain, raising broader questions about the transparency and fairness of these emerging financial platforms.