B|E Brief: Why Would A President Destroy The National Economy By Destroying The Federal Government?
a B|E Brief
We’re not even a full month into the second-term presidency of Trump and it’s already a chaotic and disastrous roller coaster ride of epic proportions. It’s all deliberate and expected: it’s not like he didn’t tell everyone what he was planning to do if he was elected and many of us were reading (well … we should’ve read) that 920-page document infamously known as Project 2025.
What’s apparent is that Trump, along with other conservatives and iniquitous billionaires like Elon Musk, are planning on completely deconstruction the federal bureaucracy. What this will do is obliterate the long-held social contract holding a society together. But, in that process of dismantling the administrative state, is there any thought as to what impact that will have on the national economy?
Let’s, for a quick moment, give in to the assumption that the president does not want a faulty economy. He wants to be viewed as strengthening the economy and not plunging it in to recession too fast - recessions do happen, but why would you want to create one intentionally? This is what this chain sawing of the federal government does if you’re - overnight - unpiecing a nearly $7 trillion enterprise that regulates and holds together the world’s most powerful economy. That represents 23 percent of gross domestic product …
Gross domestic product in US$ stands at over $27 trillion …
So, why would you want to disrupt that? What’s the reason behind that? And what sense does it make to cut the federal workforce, comprised of 3 million workers, by 75 percent, as Musk has reportedly wanted to. That’s, as the Congressional Budget Office shows, $271 billion in federal employee payroll - or, about 3 percent of the $27 trillion GDP we just described above.
In cities and states with large federal workforces, that’s an economic apocalypse. Take Washington, D.C., the headquarters of the federal government. The federal bureacracy accounts for 40 percent of the D.C./Maryland/Virginia regional economy. As George Mason University economist Terry Clower explains when describing the DMV area economy …
Forty percent of our economy is based one way or another on the federal government. We are not a diversified economy. A federal job means more than just a federal job. On average, for every job in the federal government, you explain two to three jobs in the regional economy.
Nobody’s come close to this. There hasn’t been this kind of a direct threat in modern history to the Washington region economy.
That region is the 5th top ranked metro area in the U.S. by economic output or that’s $541 billion in GDP. Translated, that’s about 8 percent of national GDP.
Why would a president want to wreck that? And exactly who or what will he blame when all those jobs are lost, GDP rapidly plummets and the economy is thrown into an even more devastating recession?