Charlie Munger once said that “it’s not the bad ideas that do you in, but the good ones.” While some have taken this quote to mean that people get stuck too easily on their good ideas, even if they don’t work. But you can also consider this to mean that poorly implemented “good” ideas can have dangerous consequences for these ideas, perhaps even more so than people never taking your ideas seriously in the first place.
At least as currently implemented, I’m afraid that this is where the Department of Government Efficiency (DOGE) is. But first, I’d like to give DOGE some credit. They are at least bringing about a conversation, or a “vibe shift” in the necessity of a seemingly never-ending increase in government spending. This is at least a start to the conversation of how much government should be spending. For example, federal government spending is still nearly $1 trillion over pre-pandemic levels, totaling $6.75 trillion in 2024.
Many in the classical liberal tradition share similar values to DOGE and its supporters: government spending is out of control. However, the process in doing so is just as important. Thus far, DOGE actions have been sporadic and “transparent” but incredibly misleading. There have been many instances of numerous generous accounting practices and just plain mistakes that make their cost savings seem higher than it actually is.
There are now court cases questioning the legitimacy of DOGE’s actions. In large part, this deals with Congress having the constitutional authority over the “power of the purse.” It is not clear if the President can retroactivity not spend money that Congress allocated via spending bills. If this is deemed kosher, what is to stop future Presidents from adding to government spending without congressional approval.
Even Ayn Rand, who is by no means a pro-government ally, argued that the process of cutting government matters, not just reducing the scope of government. She warned about the dangers of repealing controls and spending overnight arbitrarily would have tremendous consequences. She suggested, and I agree, that there should be “sufficient notice to readjust and reorganize.” This allows markets to better allocate scarce resources under this new institutional environment.
There is also just a simple accounting problem associated with DOGE. While they have made strides in cutting some useless spending, this is in large part a drop in the bucket of their promises. Elon Musk and short-lived member of DOGE Vivek Ramaswamy stated they could “easily” cut $1-2 trillion from waste, fraud, and abuse. As I stated in a previous piece, the vast majority of government spending is not really on the board to cut without drastic fundamental changes.
My fear about DOGE and their sporadic nature is that they will make true spending reforms more difficult going forward. Clearly, something needs to be done about the fiscal state of the U.S. government, where the debt has grown at an alarming rate in the 21st century. However, if DOGE is not as serious about the process as they are about cutting government, there will not be the political will to undertake the true spending reforms that can open up the economy to its full potential. There is still time for DOGE to work within the constitutional framework to address spending reforms before their reputation is permanently damaged, making us classical liberals even less likely to make headway in reducing and size and scope of government in our lives.
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.
