America’s Debt Is a Symptom, Not the Disease: How Investors Can Position - Oklo (NYSE:OKLO)

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A Tale of Two Subway Stations

Clips of grimy New York platforms versus sleek Moscow or Shanghai stations highlight capacity to deliver public goods rather than mere aesthetics. They hint at structural problems that precede—and ultimately produce—America's $34 trillion federal debt.

Problem #1: Resources Flow to Low‑Productivity Services

The care‑giving boom in New York City

Between 2018 and mid‑2023, service hours in New York's Consumer‑Directed Personal Assistance Program (CDPAP) more than doubled, even as traditional agency hours fell 19%. This is a program that basically pays people $20 to $28 per hour to do errands for their elderly relatives—in some cases, on a fulltime basis..
CDPAP wages now account for roughly one in eight private‑sector paychecks in NYC.
Home‑health jobs grew by 57 k last year (≈10 %).
Medicaid reimburses most of those wages, so the dollars come from federal borrowing, yet the output shows up mostly as consumption—not capital formation.

Problem #2: Tradables Hollow‑Out

Tradables share of 2023 GDP (manufacturing + mining/drilling + agriculture):
- • United States ≈ 19 %
  • China ≈ 46 %
  • Russia ≈ 37 %
Trade balance, 2023:
• United States: −$1.1 T goods & services deficit
• China: +$800 B surplus
• Russia: +$235 B surplus
The U.S. goods‑and‑services gap widened to $140 B in March 2025, the largest monthly shortfall on record.
Borrowing to fund imported tradables is a double drag: it swells federal debt and diverts purchasing power abroad instead of into domestic plant, equipment, and infrastructure.

Problem #3: Cost Disease in Public Works

Where did the $1.2 T Infrastructure Bill money go?

Two‑plus years after passage, most "projects" remain in design or permitting. DOE progress reports celebrate jobs created, not roads or bridges finished.
Francis Scott Key Bridge (Baltimore): struck in March 2024, geotech surveys began Jan 2025, full reopening target 2028.
Crimean Bridge (Russia): bombed Oct 2022, one lane reopened in 3 months, rail traffic restored in 9 months.
The contrast underscores America's permitting maze, fragmented ownership, and litigation risk that bloat costs and timelines.

Problem #4: Public‑Order Premium

Washington has floated tying transit grants to crime benchmarks, but accurate data went dark when the FBI's NIBRS rollout left 30 %+ of agencies unable to report.
Early 2025 DOJ guidance now requires agencies to file both legacy summary and NIBRS data until compliance tops 95 %, making performance‑tied funding viable—if Congress acts.

How These Feed the Debt Loop

Low‑productivity domestic spending → weak real growth per borrowed dollar.
Trade‑deficit leakage → debt‑financed consumption instead of domestic investment.
High unit‑cost infrastructure → more borrowing for each unit of tangible capital.
Public‑order premium → higher operating costs and capital flight from cities.

Net interest is now the fastest‑growing budget line, crowding out discretionary investment while public spaces fray.

Partial Fixes Already in the One Big Beautiful Bill Act (OBBB)

The draft OBBB nods toward the right diagnosis—making bonus depreciation permanent (§ 111001) and tightening Medicaid attendant rules (Subtitle E)—but ducks the permitting morass and the accountability gap in transit funding. Until those last two are fixed, America will keep borrowing a premium price for sub‑premium public goods.
Missing: permitting reform and performance‑tied transit grants. Until those last two are fixed, America will keep borrowing premium dollars for sub‑premium public goods.

What Would Treat the Disease, Not Just the Symptom

Raise tradables share

Neutral expensing for all structures.
Fast‑track energy‑intensive manufacturing permits.
Strategic tariffs / border adjustments—including the Trump Administration's 10 % baseline tariff on manufactured imports, the 60 % Section 301 duty on Chinese EVs, and a draft carbon border‑adjustment framework—to level the playing field.

Triage transfer programs

Sunset pass‑through home‑care models unless tied to measurable outcomes.
Re‑validate disability rolls.

Slash infrastructure unit‑costs

One‑agency permitting clock.
Benchmark budgets to OECD medians; claw back overruns.

Restore public order

Condition transit grants on crime‑rate benchmarks now that national data collection is back on track.

Restrict high‑corruption inflows

Tighten visa/green‑card issuance from nations scoring poorly on the Transparency International CPI, and ramp post‑arrival audits of federally reimbursed providers to curb Medicaid & welfare fraud (e.g., the $1 B Miami led by Cuban‑American physicians and the Somali $250 M “Feeding Our Future” scheme in Minnesota.

Implications for Investors

Status‑quo trajectory (rising debt + financial repression): bitcoin‑proxy trades; gold and other hard‑asset hedges. We added to a position in one bitcoin proxy, Semler Scientific, Inc. SMLR, yesterday.

Pivot to a more productive U.S. economy: new‑nuclear names, advanced‑manufacturing REITs, and on‑shoring enablers (chip‑fabrication equipment). We exited one new-nuclear name, Oklo, Inc. OKLO, for a 385% gain last week. It was a Portfolio Armor top ten name last week as well, but I held off on putting a new trade on it, because I was concerned it had run too far. It's now up nearly 25% today, on news that it has been selected to supply power for a U.S. Air Force base in Alaska.

Holding both buckets lets a portfolio participate under either scenario.

Take‑away: Debt is the symptom, not the disease. Until the U.S. redirects capital from low‑yield consumption toward high‑yield production—and demands accountability for every infrastructure and safety dollar—borrowing will keep climbing no matter how loud the fiscal hawks squawk.

In the meantime, if you want to find Portfolio Armor's top names like Oklo, I post them in my weekly Top Names post.