The Grand Illusion
With all of the headlines about the actions of Trump and DOGE trying to cut out “wasteful” jobs with a chainsaw, so far, at least so far as I can tell, no one seems to have given much thought to the secondary and tertiary impacts of those cuts.
A relative of mine was let go last week. He wasn’t a federal employee, nor was he a lobbyist. He was a technical writer for a publishing services company, and he was laid off because one of the company’s larger clients was the Veterans Administration.
What Musk, DOGE, and Trump clearly fail to understand is that, in a great many instances, contrary to popular belief, it’s cheaper for government agencies to contract out services than to do them with government employees.
And even if it’s not, adding additional workloads on agency personnel to accomplish tasks previously contracted out is either going to slow down everything, actually increase costs, or reduce the amount of work done, if not some combination of all three, particularly if the agency is also cutting back on personnel.
Not only that, but the savings from cutting federal employees are limited. In 1960, federal employees were 4.3% of all US workers; today, they amount to only 1.4%. Zeroing out the entire federal payroll would save $271 billion a year, a mere 4% of the federal budget.
I’ve run a Congressional office, and several offices at EPA. I’ve also been a consultant working for some of the largest corporations in the United States, and the greatest waste I’ve seen has largely come from unwise Congressional mandates and laws.
First off, there’s the practice of “earmarking” where Representatives and Senators add or direct appropriations to pet projects in their state or district. A number of organizations and members of Congress have documented such earmarks, and those documented over the last ten years that I’ve been able to total amount to more than 10,000, costing more than $50 billion. And those were the ones I could easily find.
Far more serious are the instances of manipulation of defense funding for local economic development. I can remember the F-7 [The gutless Cutlass] mess from when I was a Navy pilot, because older pilots were still talking about the fact that Congressman Jim Wright (later Speaker of the House) dragged out production of the F-7 so that Chance-Vought would be able to deliver the far superior F-8, which massively increased the cost of the last F-7s, just in time for them to be retired.
More recently, in 2023 the Navy discovered that the so-called advanced littoral combat ships built in Wisconsin by Fincantieri Marinette Marine in partnership with Lockheed Martin, suffered a series of humiliating breakdowns, including repeated engine failures and technical shortcomings in an anti-submarine system intended to counter China’s growing naval capacity. The Navy decided to retire nine out of the ten ships built, because of the astronomical repair costs, telling Congress that would save $4.3 billion that could be used on other ships and systems. Various congressmen got involved, citing the 2,000 jobs that would be lost. In the end the Navy was only allowed to retire four ships and $3 billion more was allocated for repairs. – for ships originally budgeted to cost $220 million each and which eventually cost over $500 million each – before the $3 billion in repair costs.
Then there are the massive cost overruns associated with the F-35, and the Ford class of aircraft carriers, not to mention the cost of maintaining 750 military bases around the world, a number of which in the U.S. could likely be closed without adversely affecting military readiness – except they won’t be closed because various members of Congress will oppose closings in their states and districts.
But Trump and Musk want to funnel more funds to the armed services, while cutting the civilian logistical base, at a time when the military is having trouble retaining personnel.
None of this makes much sense.
There’s also the fact that many of the wasteful costs are deliberate, to keep jobs or production in certain parts of the US. From what I understand USAID for example spent almost half their total budget on domestic products, like buying grain to then donate to those in need.
It’ll be interesting to see how those second order consequences play out, because I strongly suspect they will hit red states more than blue.
Almost everything will hit Red before Blue.
Watching the situation in Maine a thought occurred to me.
It’s very possible that Blue States could choose to simply stop paying Income Taxes. As is you can with-hold 0 and pay at the end of the year and many do to invest their money and have it earn more for them before they pay.
Now… Normally the issue here is that you’re asking for an audit and possible jail time. BUT. That requires a health IRS having manpower to find you, then a health FBI or other Federal Agency to come press charges. Or barring that a Friendly State Authority to support the charges.
So… What happens in a situation where the IRS is massively understaffed and unhealthy? What happens when the FBI and other federal arms are understaffed and unhealthy? What happens when those Blue states are not willing to offere support or manpower to track down those who haven’t paid?
Blue states pay surpluses and more than they take. Red states depend on the handouts…
So… What will happen?
There is an interest penalty if the taxes are not paid quarterly. Also, many people are not well disciplined or are in such tight financial situation that the money would not actually be saved and then invested. The penalties are greater than the average person would get from a savings account. Doing this for a short time might get the attention of the current administration but in the long run it might cause more chaos.
My frustration with Elon and his obsession with efficiency is that he likely has perverse incentives to cut and gut anything that stands in the way of his personal goals.
You mentioned the F-35 program. Its cost overruns stem from how ambitious the project was—it should have been three separate planes, but instead, they worked hard to meet everyone’s requirements in a single platform. That sent the budget soaring. The end result, though, is exactly what the U.S. and its allies asked for: the gold standard for 5th-generation fighters, one that will likely guarantee air superiority for the U.S. and NATO for years to come.
Now, after we’ve paid through the nose for the F-35, Elon has publicly stated he wants to scrap it in favor of some pilotless drone swarm program. Sure, that capability sounds impressive on paper, but it’s irrelevant to how the U.S. actually fights its wars. Elon—and the long line of tech oligarchs cozying up to Trump—are salivating at the chance to grab more military contracts.
This is a guy who still hasn’t figured out how to make driverless cars work, yet he’s eager to jump straight into driverless war machines. I’m sure that will end well for all of us.
Trump and Musk are ideal leaders for all those who, like them, don’t think things through. Nothing like billions in the bank to get someone thinking they must be a “genius” who can do no wrong.
Money is great insulation from reality.
Let me amplify that a little.
Are there backwater organizations in the federal government, places set up to address some need that isn’t what it used to be? Sure. Of course. Nature of the beast.
But likewise, consider this: When’s the last time you heard liberals say “We don’t need all these social programs” or conservatives state “We can put less money to defense”?
When’s the last time you heard a citizen say “I don’t need all the aid I’m getting”?
The reality is, the public always wants more (of what they believe in or need or want), and the way for politicians to get reelected is to promise it to them. But do taxes get raised to pay for it? Oh no.
The public areas are always nice. But if you get to go into working spaces of a government office, if it’s Take Your Child to Work Day or something, you’ll see the reality is computers well behind the state of the art, crappy desks that were ugly when they were new, and office chairs that are starting to tilt in some direction.
Not all, but too many public servants have to do more and more with less and less.
And setting an ignoramus with a chainsaw loose to “fix” the problem will only make things worse and worse and worse.