This Tuesday, I delivered a talk at the Osher Lifelong Learning Institute (OLLI) focusing on the economic policies enacted during President Trump’s administration. As you might guess, the assessment was predominantly critical—particularly concerning his failure to implement significant cuts to major spending programs, his approach to both illegal and legal immigration, and his reliance on tariffs.
However, I did find a glimmer of potential optimism when discussing DOGE. I humorously opened the conversation by stating that I have no vested interest in DOGE, framing the discussion as one of detached observation.
Insights from My Research
In their analysis, Alex Nowrasteh and Ryan Bourne present some intriguing points in their piece, “Six Ways to Understand DOGE and Predict Its Future Behavior.” They highlight a key statistic:
According to Chris Edwards, total compensation for the 3.8 million federal defense and nondefense workers constitutes only 8 percent of government spending (not counting postal employees).
This statistic is crucial because it underscores a fundamental difference between government operations and the private sector. Unlike the private sector, which focuses on production, a significant portion of federal government activity revolves around the redistribution of funds. Consequently, even a 10 percent decrease in the workforce may not result in a 1 percent reduction in government spending.
Insights from a Discussion with an Economist Colleague
The specifics of which employees are cut are also pivotal. While many recognize that indiscriminate layoffs—such as those targeting probationary workers—are unlikely to yield meaningful savings, the real issue lies in the power dynamics within certain agencies. For instance, eliminating an employee from a regulatory body like the SEC or EPA could save millions in compliance costs with little negative impact. Conversely, slashing 5% of Park Service employees might save some funds, but at the expense of valuable environmental stewardship.
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Additional Note:
While preparing for my talk last Friday, I stumbled upon a humorous quote from the late Alan Simpson, the former Republican senator from Wyoming. In my search, I was saddened to learn he had passed away that very day. However, I did uncover a clever remark that resonated with my theme:
Politics is derived from Latin. Poli means many, and tics means blood-sucking insects.
Additionally, I recalled another quip attributed to Simpson, which I utilized to critique a recently enacted bipartisan effort aimed at boosting Social Security benefits for retirees with state or local pensions. During a tour of the Capitol for Japanese dignitaries, he humorously summarized the political landscape:
There are two parties in America: the evil party and the stupid party. I’m a member of the stupid party. Occasionally, we do something both evil and stupid. That’s called bipartisanship.
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