The Podcast of the Lotus Eaters - February 18, 2025


PREVIEW： Brokenomics ｜ DOGE


Episode Stats

Length

24 minutes

Words per Minute

177.70348

Word Count

4,358

Sentence Count

211

Misogynist Sentences

1

Hate Speech Sentences

2


Summary

In this episode I talk about how the US government is trying to save $52bn from its massive $7.2 Trillion debt pile, and why it needs to do something about it. I also talk about the challenges they have so far and why I believe it's not going to work.


Transcript

00:00:00.080 Hello and welcome to Brokonomics. Now in this episode I wanted to talk about my new favourite thing which is Doge.
00:00:06.340 I'm not talking about the silly meme coin currency, cryptocurrency, I'm talking about the Department of Government Efficiency.
00:00:13.940 Now at the time of recording, you'll get this about a week late, it's very early days but I'm so keen to talk about it.
00:00:21.940 I can't wait. We're just going to dive in with what we know so far and more to the point we're going to talk about
00:00:27.200 some of the challenges that it's got up ahead of it because if you are trying to cut $2 trillion from the US government spending
00:00:36.600 you have to realise what an absolutely monstrous and Herculean task that is.
00:00:42.020 I mean to put it in perspective, the mandatory spending that the US has covers about $5 trillion
00:00:49.400 and then you've got US debt expense which covers about another trillion.
00:00:53.840 So even if you cut all of the discretionary spending, which includes the military, you still wouldn't actually get there.
00:01:03.520 So the task ahead of it to try and cut even $1 trillion of recurring cost from the US spending, let alone two, is monstrous.
00:01:13.860 And we're going to get into it and I'm going to tell you, well basically we talk about the structure of Doge,
00:01:19.380 how it's going to work, some of the challenges it has, then we get into the maths of basically how can they actually do these things
00:01:26.820 and I'll lead you down the path of believing why it is completely and utterly unachievable
00:01:33.220 and then we will have some clever thinking that will get us to a point where actually it might possibly be achievable.
00:01:41.300 Right, so without further ado, let's start off with the spending problem that the US has.
00:01:47.440 Now for this, you might want to play along at home.
00:01:49.340 If you open a tab and go to the usdebtclock.org, or if you just type usdebtclock into any search engine,
00:01:55.960 it will be the top link, you'll get the US debt clock.
00:01:59.700 Now this is a fantastic website that sort of gives you the, basically calculated to the second
00:02:05.260 of what's going on with US spending and debt and, you know, taxation and collection and all the rest of it.
00:02:11.840 Helpfully, you might notice they've added a Doge clock on here, so it will tell you how much they've saved so far.
00:02:17.940 So at the time of recording, it is up to 52.3 billion has been saved, which is a big number,
00:02:26.080 but it's chump change compared to what they actually need to do.
00:02:31.420 Nor is it ticking along at the rate that they need to achieve for their self-imposed time limits,
00:02:38.760 which we get on to now.
00:02:39.980 But anyway, I just wanted to quickly cover the state of the US.
00:02:43.540 So if my editor has thrown this up on screen or you're playing along at home,
00:02:47.280 that you will see US national debt up there at 36 trillion, which is bad.
00:02:53.100 But just under that, you'll see US federal spending.
00:02:56.920 Then you've got the official and the actual, and the US government is currently spending.
00:03:01.480 And bear in mind, this is just the US federal government.
00:03:03.940 This is not state and local.
00:03:05.600 This is just the federal bit.
00:03:07.200 They're spending 7.2 trillion a year.
00:03:11.120 Why is that a problem, you ask?
00:03:12.360 Well, if you look over to the right here, you might see the US federal tax revenue, which is 5 trillion.
00:03:19.160 So obviously there is quite a large gap of about 2 trillion or 2.2 if you go on the actual numbers.
00:03:28.120 So an enormous task, but it does need doing because this debt number is quite absurd and unsustainable for very long.
00:03:38.320 If this were to carry on, do you remember I did that episode a little while back, a couple of episodes ago, on the UK bond crisis?
00:03:46.720 Where basically the bond market looks at what Rachel Reeves is doing and says something along the lines of,
00:03:52.820 I don't believe you.
00:03:54.680 Therefore, if we are going to hold your, if we're going to buy your bonds, we're going to want a much higher rate of interest.
00:04:00.400 That has been happening everywhere across the Western world.
00:04:02.520 It's even been happening in the US, but if this initiative doesn't work, then that will happen more and more.
00:04:10.720 And the rate that the US has to, well, in fact, all Western countries, but we talk about the US,
00:04:15.700 the rate that the US has to pay on its debts will just keep going up and up and up because otherwise it won't find buyers.
00:04:22.100 And then to counteract that problem, what they have to do is they just have to basically force everybody to buy their bonds.
00:04:28.700 It would be things like if you've got a 401k account or something, you've got to have 20% in US bonds, insurance companies, banks, all that sort of thing.
00:04:39.620 Anything that they can subject to regulatory oversight is going to be forced to buy more and more of these underperforming bonds that lose value year by year
00:04:49.440 because the money supply is being inflated away.
00:04:51.900 They have to do the inflation stuff as well.
00:04:54.000 They have to print money and, well, it will just trash the currency, which is not great.
00:05:00.540 It won't solve the problem and it will just be setting this up for, well, what it's doing is kicking the can down the road
00:05:05.840 and it's just storing up a bigger problem down the line.
00:05:08.820 So the Doge initiative is absolutely crucial if it works.
00:05:13.840 It's a bit challenging, but I think we can show that it's got some potential.
00:05:19.020 Right, so Doge itself, Department of Government Efficiency, it was established by an executive order
00:05:24.900 that we have a quick look at in a second, established by an executive order, I believe, on day one by Donald Trump
00:05:30.140 and it was basically its goal is to streamline government operations, cut spending, modernise government technology and stuff like that.
00:05:39.500 It was going to be Elon Musk and Vivek Ramaswamy, but Ramaswamy, well, he shit the bed, didn't he?
00:05:47.820 So there was this thing where the H-1B-1 visa thing came up and Elon went sort of full nuclear on it
00:05:57.640 and said that, you know, yes, we've got to get immigrants in, basically kind of meant Indian immigrants,
00:06:05.200 and Vivek was on board with this as well.
00:06:08.980 And, well, I'm sure you know the story, but just in case you don't, people started pointing out
00:06:14.680 that actually you can look up who's been coming in on these visas and what jobs they've been going for
00:06:21.720 and it's not the best and the brightest of the world going into incredibly difficult to recruit tech jobs.
00:06:28.200 It's basically all and sundry.
00:06:31.520 It's basically just a way to replace US natives with Indian natives.
00:06:36.900 So Musk backed down from that, but also Musk had a lot of goodwill built up
00:06:43.980 because, of course, he freed Twitter.
00:06:46.380 He changed the remit of public discourse.
00:06:50.620 You know, he kind of bought the election, which helped.
00:06:54.720 I mean, he's done an awful lot of, you know, terribly good things
00:06:57.520 and will continue to do terribly good things.
00:06:59.640 So even though everybody was a bit annoyed with him, we've all kind of forgiven Elon.
00:07:03.780 But Vivek, he put out a very uninformed tweet where he kind of basically suggested
00:07:08.980 that white Americans are lazy because they watch Saved by the Bell too much
00:07:13.140 and they didn't study hard enough and that's not really what the problem is.
00:07:18.460 The problem is that Indians tend to only hire other Indians
00:07:21.900 and that's why, you know, no matter how hard you study,
00:07:27.220 if you're a straight white male in America,
00:07:29.320 your prospects of going anywhere are somewhat limited.
00:07:33.160 So anyway, so it was going to be those two.
00:07:34.780 Vivek has basically been booted off.
00:07:37.260 You can tell this because he's given interviews on it subsequently
00:07:39.660 where he says, you know, there was a mutual conversation
00:07:44.020 and it was agreed that he would leave.
00:07:46.080 That's kind of code for, yes, I was fired.
00:07:48.380 So he's going to go off and I think run to be a senator in Ohio
00:07:51.700 or one of those middle ones anyway.
00:07:55.300 So he's gone off.
00:07:56.120 So he's now led by Elon Musk.
00:07:57.860 Elon Musk is exactly the person that you want running a cost-cutting initiative
00:08:01.420 because this is basically his whole focus at Tesla.
00:08:05.600 It's to try and reduce the unit cost as much as possible.
00:08:09.720 And, I mean, he's been enormously successful in it.
00:08:12.560 He can basically produce electric cars that are profitable,
00:08:16.040 whereas nobody else is able to do that.
00:08:18.000 I mean, all the other manufacturers, they produce electric cars,
00:08:20.220 but they kind of do it because they know that they kind of need to.
00:08:23.180 And places like the EU have said, and California have said,
00:08:26.580 they're going to stop selling,
00:08:27.640 they're going to stop letting internal combustion engine cars be sold.
00:08:31.460 So they know that the future from a regulatory push alone
00:08:34.980 is going to be electric cars in the future.
00:08:37.760 And therefore, they need to make them, but they can't make them profitable.
00:08:41.040 They tend to lose money on each one they sell,
00:08:43.180 or at least if they do earn money, it's very little.
00:08:45.300 Whereas what Elon Musk has been able to do is keep lowering the selling price,
00:08:49.740 but he's also able to keep lowering the unit price to produce as well.
00:08:54.620 And basically, the difference between those two lines,
00:08:56.520 if you track them on a chart as they go down, is the profitability.
00:08:59.720 And, I mean, he looks at it on a very fundamental basis.
00:09:02.240 I mean, I'm a big shareholder in Tesla, so I follow this thing quite closely.
00:09:05.960 But, I mean, he will, whenever he has the opportunity,
00:09:09.180 rip out whole components from the car.
00:09:12.860 He always says the best part is no part.
00:09:15.360 So he's reducing the number of parts that are always in the car.
00:09:19.100 And, you know, he was talking about this on an earnings call the other day,
00:09:21.720 saying, look, if I've got 50,000 parts that go into my car
00:09:25.580 and each of them one costs a dollar,
00:09:26.860 well, that means my car costs $50,000 to produce,
00:09:30.200 I want to save at least 15% from that.
00:09:33.560 Therefore, I need to find a way of reducing,
00:09:35.600 saving 15p on every single component that goes into it.
00:09:38.920 You know, that is very hard.
00:09:40.060 But if I can just take some of those components out,
00:09:42.840 that's significantly easier.
00:09:44.480 So he's got a really good track record on cutting spending,
00:09:48.520 you know, efficiently and making it work.
00:09:51.140 Of course, when he went into Twitter as well,
00:09:52.520 he fired something like, was it 80% or 90% of the workforce?
00:09:55.760 Which is very, very encouraging.
00:09:58.180 So anyway, do we think they're going to succeed?
00:10:00.440 Let's start off with PolyMarket.
00:10:02.740 They've got a market here for how much spending
00:10:05.040 Elon and Doge will cut in the first six months.
00:10:07.640 Now, as I'll come on to there,
00:10:09.620 they've set themselves an 18-month time window.
00:10:12.100 And you kind of need to save,
00:10:14.420 well, $2 trillion would be really nice,
00:10:16.600 but $1 trillion is really what you need to save.
00:10:19.680 So you need to be saving,
00:10:21.360 if you're going for that lower target of $1 trillion,
00:10:23.620 you need to be saving, well, $333 billion
00:10:28.740 of recurring spend every six months.
00:10:33.800 And basically, this market is saying
00:10:35.280 that it's going to be below $250 billion.
00:10:38.080 Now, that wouldn't be awful
00:10:40.240 if it was actually at the $250 billion mark,
00:10:43.780 because maybe you might find that you get better at this
00:10:48.440 as you go along,
00:10:49.400 and therefore the second and third six-month block
00:10:53.520 are better.
00:10:54.920 But actually, it's probably the other way around.
00:10:57.160 You probably identify the easiest cutting areas
00:11:00.680 in the first six months.
00:11:04.160 So I think there's an argument for placing a bet.
00:11:07.060 I can place a bet on the $250 billion to $500 billion in saving.
00:11:11.520 But broadly, the point I'm making here
00:11:13.060 is the expectations are not especially high
00:11:16.460 because of the scale of the challenge
00:11:18.980 or what they've set themselves up.
00:11:21.980 Right.
00:11:22.480 So let's take a look at the Department of Doge itself.
00:11:25.580 So it was established by this executive order.
00:11:27.980 Let's take a quick look at that now.
00:11:30.340 So yeah, here we got establishing
00:11:31.640 and implementing the President's Department
00:11:33.520 of Government Efficiency.
00:11:35.340 Purpose established the Department
00:11:36.800 of Government Efficiency
00:11:37.400 to implement the President's Doge agenda
00:11:39.880 by modernising federal technology and software
00:11:42.260 to maximise government efficiency and productivity.
00:11:45.740 It was thought that this was going to be
00:11:47.780 a brand new department
00:11:49.240 that wouldn't have time to get established
00:11:52.680 via Congress,
00:11:54.180 and therefore it'd be kind of this advisory thing only.
00:11:56.900 And it still kind of is an advisory thing only.
00:11:59.820 But basically what they've done
00:12:00.860 is they've gone in
00:12:01.560 and they've replaced the U.S. digital services.
00:12:06.200 And that's quite clever, actually,
00:12:07.440 because the U.S. digital services
00:12:08.840 is embedded across the length and breadth
00:12:11.860 of the government,
00:12:13.320 meaning that, well,
00:12:14.260 by taking over an existing organisation,
00:12:16.480 you've already got offices,
00:12:18.440 you've got the support staff,
00:12:19.480 because yes, you want to put your own people
00:12:20.900 in for the actual cutting elements,
00:12:22.540 but, well, you still want things like payroll
00:12:25.180 and stationary ordering and cleaners done.
00:12:28.160 You don't want to waste time setting that up.
00:12:29.520 So they've already got offices and the support staff
00:12:32.480 so they can get extra people in.
00:12:34.280 Because it's the U.S. digital service,
00:12:35.960 they've already got people
00:12:36.860 who understand how to pull data
00:12:39.500 out of these various departments
00:12:42.140 as we go through them,
00:12:43.120 which will be crucial for when we talk
00:12:44.280 about the structure of how it works.
00:12:45.900 And it's got this executive order behind it,
00:12:48.560 but it doesn't have statutory backing.
00:12:51.560 So it doesn't have permission from Congress
00:12:54.400 to do what it's doing.
00:12:56.360 So it's going to be an advisory body
00:12:59.080 and it's going to route them through,
00:13:02.520 I'll come to a minute,
00:13:03.400 but there's a sort of treasury department
00:13:05.800 that it's going to route its recommendations to
00:13:08.080 and then that can actually act on it.
00:13:10.160 However, given that it's Trump peoples
00:13:12.300 embedded through,
00:13:13.460 I can't see that any of those recommendations
00:13:16.840 are going to be held up even slightly.
00:13:18.840 So if a recommendation come through,
00:13:20.160 it's probably going to be acted on.
00:13:21.140 So technically, it doesn't have statutory authority
00:13:24.300 of its own to do what it's doing.
00:13:25.780 But in practice, I think that's a mute point
00:13:27.960 because it will just instantly refer them
00:13:29.740 to somebody who instantly accepts them.
00:13:31.940 And there you go, you get your cut through.
00:13:36.300 Right, so they've structured it as a series of teams.
00:13:40.200 The team thinking is quite clever.
00:13:43.200 And because it's invested in these digital services,
00:13:46.360 they're going to have a big emphasis
00:13:48.360 on interoperability, data integration,
00:13:51.920 you know, all up.
00:13:53.140 This is all within the ballpark of a tech bro like Elon.
00:13:57.520 Synchronize, what do they call it?
00:14:00.020 Synchronosity, which is a silly word,
00:14:02.380 but you know, that's what they're going for.
00:14:04.460 Okay, oh yes, I remember now.
00:14:05.660 It was Office of Management and Budget.
00:14:07.780 That's it.
00:14:08.340 So the Office and Management of Budget
00:14:10.060 is the body that can actually make the cuts.
00:14:13.600 And so they're going to be sending their recommendations
00:14:17.160 straight over to the OMB,
00:14:19.700 the Office of Management and Budgets.
00:14:22.260 So presumably they'll be getting some extra personal in there
00:14:24.520 and I'm sure they'll just be implementing whatever it is.
00:14:26.780 Okay, right, so how do they structure it?
00:14:28.640 How does it work?
00:14:29.660 So it's a series of four-man teams
00:14:31.680 that can be embedded basically everywhere
00:14:33.880 across the US government.
00:14:35.640 And the structure is a leader,
00:14:38.060 a data engineer,
00:14:39.560 a HR specialist,
00:14:41.200 and a lawyer and attorney.
00:14:43.800 So basically the leader is,
00:14:46.220 he's going to be the ideas man.
00:14:47.660 I mean, what a great job.
00:14:49.080 What a wonderful job.
00:14:49.960 Anyway, so he's the guy who goes in
00:14:52.040 and has the meetings,
00:14:54.660 figures out what needs to be cut,
00:14:56.380 says, okay, we need to get this done.
00:14:58.380 The data engineer,
00:14:59.640 this is a clever bit.
00:15:01.240 So the data engineer
00:15:02.260 is going to be looking for efficiencies,
00:15:04.580 but can also do other things.
00:15:05.640 Like he can,
00:15:06.380 so let's say you're thinking about
00:15:08.240 which headcount to cut,
00:15:10.860 going back to Elon's thing
00:15:12.040 about where he cut whatever it was,
00:15:13.640 80, 90%.
00:15:14.220 I think it was 90% of the Twitter workforce.
00:15:16.620 So the data engineer
00:15:17.740 can log into the system
00:15:19.320 and see, okay,
00:15:20.240 who's actually doing work?
00:15:22.600 You know,
00:15:22.720 who's actually sending emails
00:15:25.120 or, you know,
00:15:26.580 booking meetings
00:15:27.280 or however it is that you,
00:15:29.380 not that meetings are work.
00:15:31.980 In fact, no,
00:15:32.620 I strike that
00:15:33.500 because people have meetings
00:15:34.640 to avoid work.
00:15:36.540 But anyway,
00:15:37.220 the point is
00:15:37.800 the data engineer
00:15:38.500 can go in
00:15:39.220 and see who is actually active
00:15:40.900 because almost certainly
00:15:42.580 what you're going to find
00:15:43.400 is with a lot of this,
00:15:45.440 especially the extent
00:15:46.620 of the work from home
00:15:48.020 that US government employees
00:15:50.060 have been doing,
00:15:52.220 an awful lot of them,
00:15:53.220 and this is something
00:15:53.620 Trump has talked about recently,
00:15:54.840 an awful lot of them
00:15:55.360 are going to have second jobs.
00:15:57.000 So they're employed
00:15:57.440 by the US government,
00:15:58.340 but they're required
00:15:58.980 to do so little work
00:16:00.400 that actually they're just
00:16:01.980 collecting a paycheck
00:16:02.720 from the US government
00:16:03.420 and then going and working
00:16:04.780 somewhere else,
00:16:05.640 doing something
00:16:06.160 actually productive.
00:16:07.380 So the data engineer
00:16:08.280 will be able to spot
00:16:09.160 a lot of that.
00:16:09.960 People are interacting
00:16:11.320 through the data stream
00:16:12.460 as whatever
00:16:13.500 and get those done.
00:16:15.180 So having identified,
00:16:16.260 and you can tell
00:16:16.760 that they're a big focus
00:16:18.160 on this is going
00:16:18.720 to be getting rid of people,
00:16:20.620 which is a good idea
00:16:21.480 because people
00:16:22.820 are actually expensive,
00:16:23.840 especially you've got
00:16:24.320 a lot of them.
00:16:25.000 So you've got the HR specialist
00:16:26.200 who wants the leader
00:16:27.120 who said,
00:16:27.480 okay, well,
00:16:27.760 we need to chop
00:16:28.400 all of those people.
00:16:30.000 The HR person
00:16:31.940 can then basically do it,
00:16:34.460 get that going.
00:16:35.440 Who knows the pitfalls,
00:16:36.820 who understands
00:16:37.620 basically how to implement
00:16:39.380 that in a way
00:16:40.160 that doesn't instantly
00:16:41.340 get you dragged
00:16:42.200 through the courts
00:16:42.860 or wrongful dismissal
00:16:44.060 or whatever it is.
00:16:45.660 And of course,
00:16:46.280 the attorney,
00:16:46.880 because there is
00:16:47.720 a vast myriad
00:16:48.660 of, well,
00:16:50.580 a vast legal web
00:16:52.300 that makes it difficult
00:16:54.120 in all sorts of area,
00:16:55.380 especially if it's going
00:16:56.680 to be going
00:16:57.180 into regulatory demands.
00:17:00.420 You know,
00:17:00.720 if there are statutes
00:17:03.180 that say this thing
00:17:04.040 must be done,
00:17:05.040 then if you get rid
00:17:06.220 of the people
00:17:06.780 and the function,
00:17:08.260 well,
00:17:08.580 then you're kind
00:17:09.640 of breaking the law.
00:17:10.880 So actually,
00:17:11.760 the attorney,
00:17:12.400 as much as anything,
00:17:14.460 their role will be
00:17:15.440 to identify
00:17:16.380 if the leader
00:17:18.620 and the data person
00:17:19.440 say, okay,
00:17:19.900 well,
00:17:20.040 we need to get rid
00:17:20.540 of all of these people
00:17:21.340 and look,
00:17:22.180 let's say there's a statute,
00:17:24.500 a regulation that says,
00:17:25.960 oh,
00:17:26.860 whatever it is,
00:17:27.520 you know,
00:17:27.700 this thing needs to be done
00:17:29.040 and the data engineer,
00:17:31.460 the leader,
00:17:31.780 can confirm
00:17:32.480 that actually that thing
00:17:33.580 that apparently needs to be done
00:17:34.800 just isn't being done.
00:17:36.800 Either it isn't important
00:17:37.980 or nobody's working on it anyway
00:17:40.120 and therefore it's
00:17:40.820 a redundant thing.
00:17:42.160 The attorney can identify,
00:17:43.980 well,
00:17:44.020 yes,
00:17:44.340 that is a statutory function,
00:17:45.780 but they can also identify
00:17:47.380 that if that thing
00:17:48.800 isn't being done anyway,
00:17:50.800 well,
00:17:51.080 we need to pass it up
00:17:52.060 to chain to say,
00:17:53.020 okay,
00:17:53.140 this regulation
00:17:54.340 needs to be repealed.
00:17:55.960 Now,
00:17:56.180 the other thing
00:17:56.500 you want to bear in mind
00:17:57.260 is that actually
00:17:58.460 a lot of the regulatory mass
00:18:01.720 which is weighing down the US
00:18:03.020 is not actually regulations
00:18:05.460 that Congress has enacted
00:18:08.700 the way it should be done.
00:18:10.280 A lot of these regulations
00:18:11.480 have actually been created
00:18:13.080 by the regulatory agency themselves.
00:18:15.780 Now,
00:18:16.120 there was a very important
00:18:17.880 Supreme Court case,
00:18:20.520 which I'm temporarily forgetting,
00:18:22.400 somebody in the comments
00:18:23.080 will remember this,
00:18:23.720 but there was a very important
00:18:24.880 Supreme Court case
00:18:25.920 not that long ago
00:18:26.960 that,
00:18:28.060 was it Chevron?
00:18:29.500 Yes,
00:18:29.700 I think it was Chevron,
00:18:30.620 that basically overturned
00:18:32.720 the ability
00:18:34.580 for regulatory agencies
00:18:35.980 to make their own regulations
00:18:37.980 and therefore,
00:18:39.820 actually,
00:18:40.260 most of the regulations
00:18:41.460 that were in place
00:18:42.320 can simply be repealed.
00:18:46.320 They can just be struck.
00:18:47.540 In fact,
00:18:48.960 after the Supreme Court case,
00:18:50.600 they don't have legal weight anymore.
00:18:54.240 So it doesn't mean
00:18:54.600 the regulatory agency is,
00:18:56.380 in fact,
00:18:56.660 I think it might be
00:18:57.160 something like 80%.
00:18:58.340 80% of what
00:18:59.600 the average regulatory agency
00:19:01.500 enforces
00:19:02.240 is their own regulations.
00:19:04.520 So if you were to just
00:19:05.460 chop all of those
00:19:06.440 and the attorney
00:19:06.940 can go through
00:19:08.140 and identify them
00:19:08.920 and say,
00:19:09.220 okay,
00:19:09.360 look,
00:19:09.500 all of these need to go,
00:19:10.920 then of course,
00:19:11.380 all of the people
00:19:12.800 working on those things
00:19:14.560 as well,
00:19:15.940 they can all go.
00:19:17.360 So actually,
00:19:18.500 from a regulatory agency's
00:19:20.120 point of view,
00:19:20.860 you're going to have
00:19:21.560 what is going to be
00:19:22.880 a target-rich environment
00:19:23.940 for making cuts,
00:19:25.400 which you might think,
00:19:26.240 okay,
00:19:26.480 well,
00:19:26.780 you might start to think,
00:19:28.000 okay,
00:19:28.300 well,
00:19:28.460 Doge is easy.
00:19:29.160 Actually,
00:19:29.440 it's not,
00:19:30.020 as we come on to.
00:19:31.060 But anyway,
00:19:31.720 that's the structure
00:19:32.660 of what it is
00:19:33.700 they're going to try and do.
00:19:35.620 So that's the team level
00:19:37.220 and as you can see,
00:19:38.180 that is primarily
00:19:38.880 going after people,
00:19:40.880 functions,
00:19:42.280 out-of-date regulatory requirements
00:19:44.260 that can be chopped
00:19:45.060 and all that kind of stuff.
00:19:46.000 The other part of it,
00:19:47.600 the sort of more
00:19:48.060 top-down element
00:19:48.800 going into this,
00:19:49.740 is the US Digital Service,
00:19:51.580 which is now,
00:19:52.200 which is now the US Doge,
00:19:54.160 is going to be focusing
00:19:55.040 on government-wide software,
00:19:58.120 network,
00:19:59.040 infrastructure,
00:19:59.860 IT systems,
00:20:01.320 data,
00:20:02.020 interoperability,
00:20:02.860 all that kind of stuff.
00:20:04.020 Because Trump managed
00:20:05.720 to build so much
00:20:06.780 tech bro support,
00:20:08.600 he's got access
00:20:09.360 to a lot of people
00:20:10.240 who can go in
00:20:11.220 and start changing
00:20:12.440 these systems,
00:20:13.380 modernising systems.
00:20:14.860 Government is normally
00:20:15.980 at the back of the queue
00:20:16.920 for software efficiency.
00:20:19.480 Normally it goes,
00:20:20.600 well,
00:20:20.760 the geek get it first,
00:20:22.980 the early adopters,
00:20:24.100 then business,
00:20:24.980 and then the general population,
00:20:26.380 then finally government gets it.
00:20:27.920 They might be able
00:20:28.500 to speed up
00:20:29.260 that process a lot more.
00:20:31.880 And also,
00:20:32.220 these teams are localised,
00:20:33.760 so they're going to be
00:20:34.440 embedded within each agency,
00:20:37.180 so they can understand
00:20:37.880 the culture of the agency.
00:20:40.220 If possible,
00:20:41.080 I think they're going to draw
00:20:41.880 some of the people
00:20:42.620 from that agency
00:20:43.700 if they can identify
00:20:44.820 individuals of the right mindset.
00:20:47.160 You need to be careful
00:20:47.860 that you haven't got somebody
00:20:49.320 who's institutionalised
00:20:50.560 and captured by it,
00:20:51.580 but somebody who knows
00:20:52.440 enough about the agency,
00:20:54.620 maybe somebody
00:20:55.320 who's relatively new to it,
00:20:57.380 somebody who's not a lifer.
00:20:59.600 If you're embedded in it,
00:21:01.220 and especially if the attorney
00:21:02.460 truly understands
00:21:04.460 the legal requirements
00:21:06.640 that that agency works under,
00:21:08.540 then you can act a lot faster.
00:21:11.460 The other thing I really like
00:21:12.240 about this structure
00:21:12.880 is that it's very small teams,
00:21:15.620 and actually a team of four people
00:21:17.260 is actually about right
00:21:19.080 for the optimum speed
00:21:22.760 for getting stuff done.
00:21:25.420 I mean, the most optimal team ever
00:21:27.140 is a single individual,
00:21:28.880 because you don't have to spend
00:21:30.360 any time communicating,
00:21:32.720 but it's very quick
00:21:35.560 and you can overwhelm people.
00:21:36.740 But I think four is about optimum,
00:21:39.140 and this has been my experience as well.
00:21:40.640 Four is about the optimum number of people
00:21:42.220 that you want to assign
00:21:43.380 to a difficult problem,
00:21:44.920 because it's enough
00:21:46.080 that there's enough of them
00:21:47.420 to split up the job
00:21:48.460 and get it done,
00:21:49.200 but it's also nimble enough
00:21:50.360 and fast enough
00:21:51.100 and quick enough.
00:21:52.140 As soon as you start getting,
00:21:54.000 especially over six or something,
00:21:55.440 there's always somebody missing
00:21:56.560 scheduling times to get together
00:21:58.880 and the information gets lost,
00:22:00.380 but four, that can really work.
00:22:03.000 And actually, the other thing
00:22:03.720 I should mention before we press on
00:22:05.900 is that the big win
00:22:07.960 in all of this
00:22:09.340 is going to be embedding
00:22:10.560 a different cultural ethos.
00:22:14.320 And it's going to be moving
00:22:15.380 from basically a culture
00:22:16.980 where these people
00:22:18.260 have never met spending,
00:22:20.700 new spending that they don't like,
00:22:22.880 to one that the thought process
00:22:25.420 becomes, okay,
00:22:26.380 not only have we got to cut
00:22:27.900 existing spending,
00:22:28.880 but we've got to seriously challenge
00:22:31.180 any new spending,
00:22:32.200 and we've got to continuously
00:22:33.660 find ways to strip spending
00:22:35.960 out of the process.
00:22:37.880 Absolute bread and butter
00:22:39.380 for a private business,
00:22:41.180 a monumental mind shift
00:22:42.620 for government.
00:22:44.880 But if that is successful,
00:22:46.520 game changing,
00:22:47.420 absolutely game changing.
00:22:48.780 Okay, so the goal.
00:22:49.900 As we talked about,
00:22:50.620 they've got to try and find
00:22:52.160 two trillion of annual spending,
00:22:54.360 which is ludicrously optimistic,
00:22:56.760 as we will come to soon.
00:22:59.740 And there's going to be
00:23:00.600 enormous hurdles.
00:23:01.840 Hurdles are going to be legal,
00:23:03.100 political,
00:23:04.040 short term,
00:23:04.620 it's going to be operational
00:23:05.420 because these structures
00:23:07.240 are set up in a certain way.
00:23:08.400 If you just start chopping
00:23:09.780 large chunks of them out,
00:23:11.340 then entire functions
00:23:12.720 need to disappear.
00:23:13.720 And actually,
00:23:14.220 that is absolutely
00:23:15.220 how it needs to go.
00:23:17.000 And a lot of it,
00:23:18.860 as we get to the more difficult stuff,
00:23:20.880 is going to require
00:23:22.160 congressional support.
00:23:23.620 And the difficulty
00:23:24.580 that you've got there
00:23:25.640 is that you're going to...
00:23:27.420 So the way that Congress
00:23:28.460 has worked for many decades
00:23:29.540 is that the congressman
00:23:30.900 is a lobbyist,
00:23:33.040 effectively,
00:23:34.480 to get more federal spending
00:23:36.820 directed to their district.
00:23:38.400 And that's how they measure support.
00:23:40.000 And in fact,
00:23:40.500 some of the early anecdotes
00:23:41.700 I've heard coming out of this
00:23:43.120 is Congress is very supportive
00:23:45.060 of cutting
00:23:45.940 all spending initiatives
00:23:47.940 from every program
00:23:50.100 that doesn't affect
00:23:50.900 their individual district.
00:23:52.560 And they are very focused
00:23:54.580 on protecting
00:23:55.300 anything
00:23:56.460 within their
00:23:57.640 particular district.
00:24:00.180 So it's going to be
00:24:01.600 a real issue
00:24:02.360 getting congressional support
00:24:03.720 over the line
00:24:04.400 when it kind of
00:24:06.140 180s
00:24:06.960 their entire
00:24:08.120 remit.
00:24:08.980 I mean,
00:24:09.520 just how they've operated
00:24:10.600 for decades.
00:24:11.320 That's all they do.
00:24:12.880 Basically,
00:24:13.360 all congressmen do
00:24:14.000 is they try and get
00:24:14.460 spending directed.
00:24:15.960 US federal spending
00:24:17.160 keeps going up.
00:24:18.180 How can I get more
00:24:19.240 and more of it
00:24:19.740 directed to my district?
00:24:20.980 So that's going to be
00:24:21.920 a fundamental challenge.
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