He said he bet his life savings on Elon Musk’s Department of Government Efficiency failing to shrink federal spending — and won.
Now, he’s answering some questions.
Alan Cole, a 37-year-old senior economist at the conservative-leaning Tax Foundation in Washington, DC, said in a Wall Street Journal profile that he made a $342,195.63 bet on the prediction market Kalshi on whether federal spending in each quarter of 2025 would be higher than it was in the fourth quarter of 2024.
Ultimately, it was, and Cole says he ended up winning $470,300.
That’s a return of more than $128,000, or about 37%. He told the Journal that he made multiple sub-bets to spread out the risk and that he would only lose money if federal spending fell by more than $50 billion.
Federal spending ultimately grew by hundreds of billions of dollars in 2025, despite DOGE’s goal of slashing federal spending.
In a lengthy post on X, Cole addressed several questions that readers may have had about the bet.
I’ll do a little FAQ for if you clicked over to my profile from the WSJ article, which got more popular than I expected.
Q: Was this a terrible risk?
A: I promise it was fine and I was never worried about it. Closer to 100% than 99%, ex ante. The article mentions I considered it…— Alan Cole (@AlanMCole) February 26, 2026
For one, he said he was “never worried” about the risk associated with the bet, viewing it as akin to a bond.
He also noted that federal spending is currently “dominated by senior programs” that have automated increases built in, plus interest payments on the national debt. “Growth in these things is simply larger than the discretionary spending cuts,” Cole wrote.
Cole also addressed whether it was a bad idea to risk such a large amount of money for a smaller return.
“Most good assets look like this, actually,” Cole wrote. “If anything, assets with potential for super-high returns relative to principal, like out-of-the-money call options, are the dangerous ones.”
He also said that while he was taking a financial risk, he wouldn’t lose everything if he lost his wager, given his “big future earnings potential” and assets like his home and a retirement account.
Cole also said he didn’t “hate” Musk, as some might think.
“He has a mixed legacy for sure,” Cole wrote, “but I wish him the best especially on his most productive enterprises like SpaceX and Tesla.”
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