The Mericans’ Costly Lesson – Part 2: Why the Nanny Needs to Go

Let’s connect our Merican family allegory from my last post to reality.

It has become evident that the nanny state, the overprotective, disempowering, enabling, constituent-devouring political class, has been buying the votes of the American people with our own highly leveraged tax dollars, while mismanaging and misappropriating the family’s finances. My fellow Americans, this is not a left or right issue. The elitist, entrenched nanny state, in a cloak of red and blue, has been buying favor so it can usurp power and scam us. The impact of this nefarious behavior is a $37 trillion national debt, deca-millionaire “public servants,” and the prosperity of political cronies. In light of this, of all the initiatives of the Trump administration, the Department of Government Efficiency (D.O.G.E.) should be the least controversial. The nanny needs to get fired, and here is why.

Our fiscal situation is an existential crisis. Let’s break this down while keeping the household metaphor intact: The US “family” budget is about $7 trillion, and we have roughly $5.2 trillion in income. This puts our deficit at $1.8 trillion. For those keeping score at home, a trillion is a million millions. That is some real money. The death spiral has begun as we now spend around a trillion annually on interest payments for our national debt. This is 15% of the federal budget going to interest! The consensus from economists like Ray Dalio is that we need to get the deficit to 3% of gross domestic product (GDP); this is about half of what it is now, or $900 billion. This level puts us in a good position because normal inflation and future GDP growth will cover the debt payments in the future.

In Summary:

• US Gross Domestic Product: $30 Trillion. The total value of goods and services produced in a year.
• Federal Debt: $37 Trillion. How much we owe.
• Federal Budget: $7 Trillion. What the government intends to spend this year.
• Federal Revenue: $5.2 Trillion. This is what the US government will take in to pay for the budget.
• Federal Deficit: $1.8 Trillion. This is the gap between what the federal government will take in and what the government will spend. Each year this is added to the Federal debt.
• Target Maximum Deficit: $900 Billion. We need to reduce the annual Federal deficit to this level to stop the death spiral.

Whether the financial details are your thing or not, the bottom line is we need to cut our deficit by $900 billion in order to stop the death spiral. We can do this in two ways: 1. raising income, 2. cutting costs. We can debate the best way to increase government revenue in another forum. The low-hanging fruit, the easy layup to close the gap, is to go after waste and fraud. This is clearly the best first step and really should be easy.

Consider this: the Washington system operates with other people’s money, possesses the power to print currency, and yet, shockingly, lacks a basic payment tracking system. Given these fundamental inefficiencies and incentives, common sense suggests that waste and fraud likely exceed 10% of the government’s budget. This is significant because cutting just 10% of our federal budget, a substantial $700 billion, would halve our current deficit and bring us within striking distance of Ray Dalio’s target of 3% of GDP. As someone who has run a large but lean business, I can attest that identifying double-digit cost reductions is always achievable when necessity demands it, as it has three times in my 23 years of operation. We can absolutely find 10% to cut from the federal budget.

What if Social Security could actually remain solvent without any major structural overhauls? What if we can reduce military spending without undermining our security? I am beginning to think these things might be possible, but not if we leave the job to career politicians who are incentivized to tinker around the edges and play games so they can keep the gravy train running. We are at almost $37 trillion in debt – 100% of our GDP. It is time to get our house in order. Elon has exposed the nanny, and DOGE is going “founder mode” on the federal government – I love it, and you should too.

The nanny is not going away without a fight. With the help of her friends in the languishing legacy media, she is whipping up the children with reductionist, rich-must-be-wrong rhetoric, framing DOGE as a billionaire power grab. The “hands-off” kids are taking to the streets, and the anarchist fringe is burning Tesla dealerships. I have no issue with thoughtful debate, but vilifying the efforts of Elon and DOGE is wanton manipulation to preserve the status quo. The status quo is a death spiral for the family.

Haven’t we complained for years that Democrats and Republicans need to work together to actually get something done? The reality is that DOGE is a non-partisan movement. I urge my Democrat friends to look objectively at the DOGE team – Elon and Antonio Gracias were both big Democrat donors just a few years ago. Tangential to DOGE, Scott Bessett, our Secretary of the Treasury, was also a Democrat just a few short years ago. These are some of the most brilliant business and economic minds of our generation who have torn off monochrome partisan patches and are working, FOR FREE, to help lead us out of the abyss. Career nanny politicians who have never built anything, who have never made an unpopular decision because it was the right decision, will not lead us out of this. Perhaps we should be quiet for a minute and listen objectively and openly to what the most brilliant mind of our generation has to say about the weaknesses he and his team have found in our system.

Some say DOGE should take a more measured approach to avoid cutting things they should not cut. This argument deserves consideration but is an academic strategy that will not survive in the wild. We know this because this is our third attempt to cut waste, fraud, and abuse in recent history. To President Clinton and President Obama’s credit, they both set up programs to go after waste, fraud, and abuse. Clinton’s attempt was more successful than Obama’s, but neither had a substantial impact because they took the “measured” approach academics and intellectuals are arguing for now. A political animal using political means is not capable of systemic change. A broken system cannot be reformed; it must be dismantled and rebuilt.

A couple of weeks ago I heard Ezra Klein, who is a smart guy, say he wants clear objectives for DOGE and that he doesn’t support haphazard change. Come on, a trillion in cuts is the clear DOGE objective. How much more clarity do you want? Reducing our deficit is non-negotiable. Ezra and his friends do not seem to understand that we cannot spend money we do not have – the bill has come due.

Elon makes guys like Ezra nervous because, with all due respect to the achievements of academics and reporters, most have never built anything, never led an organization in a time of crisis, and have never had to make painful cuts to preserve the core of an enterprise. A $1.8 trillion deficit means we actually need to get aggressive. Certainly, there are some things that will get cut that should not be cut; that is a very real risk. When those things are spotted, they can be put back – the easiest thing in the world to do is spend money. We have proven our proficiency in this area already.

Trump derangement syndrome is a real thing, and most of us have a very pixelated view of politics. We’ve got to look at each of these initiatives, whether DOGE, or MAHA, immigration, or tariffs, and judge each on their own merit. It is not an all-or-nothing proposition with the Trump agenda. Certainly, a reasonable populace is capable of rising above their triggers and blind party affiliation and seeing the necessity of stopping the financial death spiral and getting behind the efforts to cut the outrageous waste, fraud, and abuse.

Who is the nanny state? The most obvious element of the nanny state is the vociferous anti-DOGE crowd – Patty Murray, Bernie Sanders, Chuck Schumer, Elizabeth Warren, Ro Khanna, Lindsey Graham, and Susan Collins, just to name a few. Perhaps the more insidious element of the nanny state are leaders who give lip service to tackling our debt but lack the fortitude to do the difficult but right thing when faced with possible political fallout. The reality is DOGE only has the power to eliminate a limited number of discretionary items. They are there to uncover waste, fraud, and abuse, and then Congress needs to cut and appropriate funds accordingly. If Congress does not follow through, this will all be for naught.

These representatives work for us, and they are using our tax dollars. It is said, “a democracy can only exist until its voters discover they can vote themselves largesse from the public treasury.” This is up to us to understand the gravity of the situation, make some noise and contact your representatives. I am hopeful but wary; the nanny knows how to push all the right buttons and is pulling out all the stops to keep the gravy train on the tracks. Don’t fall for it; the nanny needs to go!