Ok, So Now What?

An acquaintance of mine thinks the Federal government is perfect. Every dime is spent wisely as if the government worker was spending their own money. Each rule is followed scrupulously and every worker puts in 40+ hours per week, regardless of whether they are home or in the office. And there’s no duplication of effort where different departments do the same things. There’s not one thing this person would change.

I’ll wait until you stop laughing.

Now you may disagree with the scope of spending cuts, or the methods used to achieve them, but the American people are squarely behind shrinking government as indicated by polls here and here.

What most people don’t realize is that if we just dropped back to the pre-Covid spending, we could make a huge dent in the deficit. The fact is, spending went way up to cope with Covid, but never ratcheted down after the pandemic ended. That’s the way of government and politicians.

Cutting spending is nothing new. 32 years before DOGE, Al Gore did it. Obama campaigned on cutting waste and promoting efficiency.

Even the concept of a department not created by legislative act isn’t new:

• Keep Commission (1905): Established under President Theodore Roosevelt, this commission aimed to increase government efficiency.

• Grace Commission (1982): Under President Ronald Reagan, this commission was tasked with identifying waste and mismanagement in the federal government.

• National Performance Review (1993): Led by Vice President Al Gore under President Bill Clinton, this initiative aimed at making government more efficient and customer-focused.

• National Commission on Fiscal Responsibility and Reform (2010): Also known as the Simpson-Bowles Commission under President Barack Obama, this body was tasked with addressing the national debt and deficit.

Regardless of what’s being cut or how the cuts are being made, according to Gallup, 55% of the American public thinks the government is doing too much:

Anyway…..

There are two ways that the size of the Federal government is being reduced: shrinking employee headcount and decreasing spending on existing programs.

Ideally, cost reductions due to increased efficiency and the elimination of fraud and abuse would, hopefully, not require cuts to legitimate and popular social programs.

* * *

Here’s an example of how our government has not been a good steward of our tax dollars. We keep hearing that Social Security is running out of money. Some say this could happen as soon as 2036.

Well, a little investigation of the Social Security system found that over 16 million people over the age of 110 were receiving benefits. That includes someone over the age of 360! According to the U.S. Census Bureau there were 101,000 Americans aged 100 or more.

I guess George Washington is still collecting his Social Security.

Oh, and if you add these numbers up, you see that the Social Security system has over 394 million active participants. Considering that the U.S. population is about 335 million, it’s safe to assume that there are some duplicate Social Security numbers is their system. Who’s collecting that money? If not for bureaucratic incompetence, how else could this happen?

Talk about waste and fraud! Does that sound like good stewardship of our tax monies?

* * *

It might sound like there’s a lot of good coming out of the Department of Government Efficiency, but, depending on how successful they are, there may be some bad.

Unemployment

I’ve written several times about how the Bureau of Labor Statistics (BLS) reports unemployment. The last was “The Economy is So Bad.”

Government jobs are a component of the nation’s employed base. So, when the number of government workers decreases by a sufficient amount, the unemployment rate may increase.

Those changes will be temporary as highly-skilled government employees should find new work quickly.

Gross National Product

Gross National Product (GNP), is a measure of the total monetary value of all goods and services produced by the U.S. during a year. This measure includes government expenditures which represent a substantial portion of the total.

An economic recession is considered to be two or more consecutive quarters of negative growth in real GNP.

Because government spending is such a large part of GNP, a significant decrease in spending, if not offset by gains in other areas of the economy, could show the country is in a recession, even when the private sector is healthy and growing.

Prediction

Depending on where you get your news, it’s possible that you didn’t know about the mess at Social Security which has been described as possibly being “the biggest fraud in history.”

Different news sources place different weights on the importance of stories and perhaps something was prioritized above that story in your news feed.

Anyway, here’s my prediction:

If either the unemployment or GNP results turn negative as a result of cutting government, that will be the lead story in the corporate media for at least a day and perhaps longer. The topline numbers will be reported without any explanation of why this occurred and what it means to the public at large. The elimination of “waste, fraud and abuse” will be vilified at every opportunity.

Betcha a dollar.