"The virtue of the matching market is that you can take the good side of a bad bet - someone else's bad bet. Cole positioned himself against other bettors who believed DOGE would successfully cut federal spending, allowing him to profit when those predictions failed to materialize."
"When the federal government's final tally from 2025 hit on February 20, Cole's ridiculous gamble looked more like a sure-fire bet. Per the WSJ, the lowest spending ever got in 2025 was still $66 billion above the threshold Cole needed it to maintain."
"Kalshi ended up paying out $470,300, a profit of around 37 percent - which, depending on how strong a stomach you have, isn't bad for a year's worth of risk. There's a little bit of that feeling of vindication, the tax economist said."
Alan Cole, an Ivy League tax economist, placed his complete life savings of $342,195.63 on a prediction market bet through Kalshi in 2025, wagering that Elon Musk's Department of Government Efficiency (DOGE) would fail to reduce federal spending below fourth-quarter 2024 levels. Despite Musk's significant workforce cuts, he fell far short of his promised $2 trillion in reductions. Cole's prediction proved correct when final 2025 federal spending figures came in $66 billion above the required threshold. His bet paid out $470,300, representing a 37 percent profit. Cole controlled over 3 percent of a $12 million federal-spending prediction market book, positioning him to win substantially when other bettors lost.
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