Chasing Efficiency: Can the DOGE Bros Fix America’s Fiscal Woes?

This week’s insight is all about the DOGE Bros.

The average US federal budget deficit (as a percent of GDP) has grown under the first term of each president so far this century. Recessions can obviously drive increased spending to stimulate the economy and wars are expensive, but during tranquil financial and geopolitics periods, the federal government should be able to at least break even. That hasn’t been the case recently, and it’s hard to see it changing any time soon.

There’s some hope that the newly created and unofficial Department of Government Efficiency (DOGE) will trim the federal fat. Elon Musk, the world’s richest person with an estimated net worth of $455 billion, and fellow private-sector success story, Vivek Ramaswamy, hope to streamline operations in DC by slashing wasteful spending and axing superfluous jobs.  

The DOGE Bros will have their work cut out for them, though. In order to make headway on the deficit, the major entitlement programs would have to be altered; Social Security, Medicare, and Other Health Services comprise 49% of FY 2025 US government outlays. National Defense is 14%, Net Interest is 13%, and Income Security is 9%. Peace through strength on the global stage and lower Treasury rates would certainly help quell the deficit, but Social Security and Medicare are extra delicate subjects that few politicians are bold enough to touch.

I don’t have the answers here, but DOGE has a shot clock to monitor. The Department’s supposed expiry is on the nation’s 250th birthday – July 4, 2026. Another challenge is that the government has been a major source of job growth over the past few years. Halting its expansion along with dolling out pink slips could cause broader economic weakness.  

DOGE must partner with the Department of the Treasury and Congress on how to tackle the spending problem. Incoming Treasury Secretary Scott Bessent inherits a fiscal mess; even the outgoing Treasury chief Janet Yellen admits she’s “sorry” progress wasn’t made on the deficit.

So, have at it, DOGE Bros. The optimistic take is that with private-sector experts analyzing the situation with fresh eyes, positive change occurs. But the national debt clock has ticked above $36 trillion…and it will keep rising as the new administration takes office next month.