I gave an OLLI (Osher Lifelong Learning Institute) talk on Tuesday on President Trump’s economic policies and actions. As you might imagine, it was pretty negative–on failure to cut major spending programs, on cracking down on both illegal and legal immigration, and on tariffs.
The one potentially bright spot was on DOGE. I led by telling them that I don’t have a DOG in the hunt.
But I pointed out something about DOGE’s limits that I learned from my research and also from a discussion with a fellow economist.
From my research
Alex Nowrasteh and Ryan Bourne noted, in “Six Ways to Understand DOGE and Predict Its Future Behavior,” the following:
According to Chris Edwards, total compensation for the 3.8 million federal defense and nondefense workers accounts for only 8 percent of spending(excluding postal employees).
Why does this matter? Because government isn’t like most of the private sector. The private sector produces things. A huge amount of the federal government involves government handing people massive amounts of money. So if the number of employees falls, even by, say 10 percent, you probably won’t cut government spending by even 1 percent.
From a discussion with an economist friend
It matters which employees you cut. Of course, many people have noted that. You probably aren’t going to cut the right employees by cutting probationary workers, for example. But I’m getting at something different. An employee at certain government agencies–I’m looking at you, SEC and EPA–might have the ability and the power to impose $10 million in costs for little benefit. Cut that employee and make sure the other employees are too busy to pick up his portfolio, and you would save $10 million. The saving on his salary would be rounding error.
But cut the number of Park Service employees by 5% and you’ll save a little by possibly giving up valuable things they were doing.
Added note:
When I was prepping my talk last Friday, I remembered a funny line that Alan Simpson, the former Republican senator from Wyoming, had had about politics. I googled his name to find it and, lo and behold, learned that he had died that day. I did find a funny line I remembered but not the one I was looking for.
Here’s the funny line I found (here at the 8:37 point):
Politics is derived from Latin. Poli means many and tics means blood-sucking insects.
There’s another one I’m going from memory on, and I used it to criticize a recent bipartisan measure to increase Social Security benefits for retirees who have state and/or local government pensions.
Apparently, Simpson was giving a tour of the Capitol building to a bunch of Japanese dignitaries and was trying to explain the U.S political system in a few lines. Here’s what he said:
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.
