Charlie Munger famously remarked that “it’s not the bad ideas that do you in, but the good ones.” This aphorism has sparked debate; some interpret it as a warning against becoming too attached to ideas that may not yield results. Alternatively, it can be seen as a caution against the perils of poorly executed “good” ideas, which may inflict greater damage than simply being ignored. This perspective seems particularly relevant in the context of the Department of Government Efficiency (DOGE).
Before delving into the criticisms, it’s worth acknowledging that DOGE has successfully initiated a discussion or “vibe shift” around the seemingly relentless growth of government spending. At least it’s a step in the right direction regarding how we view federal expenditures. As it stands, federal spending is still nearly $1 trillion above pre-pandemic levels, projected to reach a staggering $6.75 trillion in 2024.
Many advocates of classical liberalism resonate with DOGE’s assertions that government spending is rampant. However, the method by which these reforms are pursued is equally critical. To date, DOGE’s actions have been erratic; while they tout transparency, the reality may be more misleading than it appears. Numerous instances of questionable accounting practices and outright errors have inflated their claims of cost savings. Experts have raised concerns about the legitimacy of these figures, which raises questions about the integrity of their approach.
Legal challenges are surfacing that question the constitutionality of DOGE’s actions, particularly concerning Congress’s exclusive authority over the “power of the purse.” If the President can retroactively decide not to spend money allocated by Congress, it opens a Pandora’s box for future administrations to expand government spending without legislative oversight.
Even Ayn Rand, not exactly the poster child for government advocacy, emphasized the importance of procedural integrity in budget cuts. She cautioned against arbitrary reductions and emphasized the need for proper adjustments to avoid chaos in resource allocation. A thoughtful transition period allows markets to recalibrate and adapt to a new fiscal landscape.
Additionally, DOGE faces an inherent accounting dilemma. While they have made some progress in trimming wasteful expenditures, these cuts represent just a minor fraction of the grand promises made. Elon Musk and former DOGE member Vivek Ramaswamy boldly claimed they could “easily” eliminate $1-2 trillion in waste and fraud. However, as I pointed out previously, a substantial portion of government spending is not easily reducible without fundamental systemic changes. The reality is stark.
My concern with DOGE’s erratic approach is that it may inadvertently hinder meaningful reforms needed for long-term fiscal sustainability. The U.S. government’s debt trajectory has reached alarming heights in the 21st century. If DOGE does not prioritize procedural rigor alongside cost-cutting, the political momentum necessary for genuine fiscal reform may dissipate. There’s still an opportunity for DOGE to operate within constitutional boundaries and pave the way for substantive spending reforms. Failure to do so could irreparably tarnish their reputation, making it even more challenging for proponents of classical liberalism to advocate for a leaner, more efficient government.
Justin Callais is the Chief Economist with the Archbridge Institute and Co-Editor of Profectus Magazine. He has a Substack on economic prosperity called Debunking Degrowth.
