I have to say I dont blame you for how you feel especially with kids around. Sounds like to me like he is being very dominant.
I have seen the dog guy on tv and he takes away any treats like bones etc with dogs like this. Also not allowed on the couch or bed. He has to be on the floor at all times so you are above him.You can put a comfy bed on the floor for him.He should not be carried around so he is at your level either.
I think we tend to maybe over spoil them as puppies as they are so adorable and they start to think they are the king or queen of the castle and we have to retrain them and make them realize they are not.
I guess if his behaviour works for him he will keep it going so you must change it somehow or your kids or another kid will get hurt. Kids come first in this situation always.
Sorry but one of my daughters years ago was bitten badly in the face by a small dog in her friends yard. She wanted to kiss him and he bit her. He had a chew stick.Kids dont get over this easily and have fear of dogs for years to come.
Dont give up on him yet but please do work this issue and if you cant change it then maybe you will have to give up and rehome him.