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America is on the Brink of Bankruptcy

Chances are you have balanced your personal finances. Whether you do it weekly, monthly or annually, everyone has some grasp of their income and expenses. Especially when it comes to tax season.

But for some reasons, the politicians you voted for and get paid with your tax dollars, cannot balance the Federal budget. In fact, the same people in government, managing their personal budgets, can’t seem to track government expenditures. Something is wrong and it needs to be fixed.

That’s where D.O.G.E., the Department of Government Efficiency steps in. President Trump campaigned on the idea that cutting government waste would be a top priority. This idea was not unique to him and has been campaigned on by past presidents several times. The notable was Bill Clinton, who delivered an economic surplus from 1998-2001.

The D.O.G.E Tracker

So what’s different this time? For starters, the Trump Administration with Elon Musk, is dead focused on transparency. In prior years, we didn’t have the best technology (A.I.) or the best technologist available to the government. In fact, I can’t remember the last time I’ve seen so many businessmen working for the government at the same time.

These men include David Sacks, Howard Lutnick and Scott Bessent. Each one now works within the Administration to improve the efficiency of government. Yes, efficiency is the key word here.

America’s Debt Clock is Ticking

Have you ever looked at the debt clock of America? There’s a famous billboard with a debt clock in Midtown Manhattan, at One Bryant Park and 151 W 42nd Street. If you can’t go to midtown, I recommend the U.S. Debt Clock website for real-time updates. As of March 16th, the national debt was $36 trillion.

If this is your first time looking at the debt clock, there are several alarming numbers that should capture your attention. First, $36 trillion is a massive number. For context, Warren Buffett uses a metric similar to the U.S. Federal Debt to GDP ratio as an economic indicator to value the market. Investors call it the "Buffett Indicator” and it compares the total stock market capitalization to GDP. As of December 2024, the indicator stood at 211%, suggesting that the stock market was strongly overvalued relative to the overall economy.

Now smart investors will look at several indicators before making macro investment decisions. Debt to GDP is one example because it gives an indication of the country’s financial health.

Before moving forward to taxpayer savings, I want to highlight the Debt per Taxpayer number which is $323,048 as of March. This number is almost equivalent to the average mortgage balance an American homeowner carries today. Imagine paying two mortgages every month; it's a massive burden that underscores the urgency of addressing our national debt.

How to reduce the Debt in an effective manner

The problem with the National Debt is the number is growing exponentially. In many ways, the country is effectively bankrupt if we cannot grow the economy or cut spending at an aggressive rate. Our interest rate expense to service the debt is ~$700 billion per year and almost as much as our annual military spending budget. This is a serious problem and not sustainable. Which is why the people voted for the Trump Administration last November.

That’s why President Trump started the Department of Government Efficiency, better known as D.O.G.E. For context, this department came out of the United States Digital Service (USDS) in 2014 during the Obama administration. The USDS was created to solve the Healthcare.gov crisis from 2013. To build the Healthcare.gov website, it was estimated to cost $100 million dollars. The Office of Inspector General estimated that the true costs were $1.7 billion from 2009 to 2014. That’s your tax dollars at work.

Americans are tired of tax dollars being wasted. Which is why DOGE is working aggressively, day and night, to save Americans their money. As of today, the DOGE team has saved ~$714.29 per taxpayer. This is an astounding number. The team is working to save taxpayers $4 billion per day.

For transparency, there are several websites you visit to track the savings. First, is the U.S Debt Clock website but that doesn’t have receipts. Instead I’ve been monitoring the DOGE website for real-time updates.

Someone else also spun up another DOGE tracker website so we can analyze the savings and payments in real-time. There you can find more details and predictions regarding government savings.

Waste, Fraud and Abuse of Taxpayer Dollars

In the leaderboard above, you’ll notice that the USAID takes the cake for most savings. At first glance this might be a concern until you realize that the A.I.D. in USAID stands for the Agency of International Development, not aid.

The savings comes from USAID violating the President's executive order to freeze government hiring and funding for 90 days. 82% of the program’s funding was cut, and the remaining 18% of USAID programs are being moved under the administration of the State Department with Marco Rubio.

Now from the surface, $20-30 billion doesn’t seem like much when it comes to a multi-trillion government budget. But that’s a serious number when accounting for two factors: the country is running at a massive deficit ($2 trillion) and +$20 billion is a lot of money.

For context, the average market capitalization of a publicly US-listed company is $7.3 billion. And public companies need to generate revenue and profits to have a sustainable business model for investors. Many government organizations and departments are simply spending taxpayer dollars without accountability. That’s why our deficit keeps growing. Government spending has become unsustainable and we need to bring it back to the 2019 levels, pre-Covid.

Some of the programs cut have been classified as abuse but I think more savings will come from identifying fraud and waste. The Military and Healthcare-related Departments might have $200 billion in fraud and waste alone. For example, the Pentagon has failed its seventh audit since 2018. The department has been able to account for how its ~$800 billion budget was used. This is a major red flag.

In fact, as of last March, the Government Accountability Office (GAO) estimated that the federal government made approximately $236 billion in improper payments for fiscal year 2023 (October 1, 2022, to September 30, 2023), which falls within the Biden administration.

The U.S. government itself has stated that the upper-end of federal fraud may be as high as $521 billion. That’s a lot of money. It’s also about ¼ of the $2 trillion DOGE would like to save taxpayers.

In fact, if you go a step further, you can see that Medicaid and Medicare are the largest numbers when it comes to payment errors. $100 billion in taxpayer dollars are unaccounted for. This is a significant problem that can result in significant savings.

How will this help American citizens

First, tax savings are tax savings. Everyone wants to save money, no matter how big or small the dollar amounts. Right now taxpayers want to hold the U.S. government accountable and make sure fraud, waste and abuse no longer exist in the system.

Right now there are early talks of a Doge Dividend for taxpayers. The amount might be as high as $5,000 but the refund will probably be income-based. Either way, I’ve never seen the U.S. government deliver an incentive like this.

Overall, the U.S. national debt presents a significant challenge. I think the Department of Government Efficiency (DOGE) is working to address this issue but it wont solve everything in one Administration. Elon and his team are only focused on cutting $2 trillion of waste. At the current pace, I think $1 trillion in savings is attainable by Sept 2025.

Of course, the natural concern is what will happen to the government employees and programs being cut here. I think the taxpayer dollars spent will go from non-productive (public) to productive (private) sectors in the economy. Taxpayers will save more money so they can spend and reinvest as they see if fit.

I’ve never met anyone who thought the government could spend or invest money more efficiently than they can. If that was the case, taxpayers would donate extra money to the government every year.