In a bold and transformative move, President Donald Trump announced his administration’s intention to downsize the federal government by offering compensation to federal workers who voluntarily resign. This policy aims to enhance the efficiency of the American economy by reducing bureaucratic inertia and reallocating human capital to more productive sectors. While the proposal has sparked controversy, it represents a crucial step towards fostering a dynamic and innovative economy.
Undoubtedly, the private sector is more efficient than the government in allocating resources, driving innovation, and responding to market demands. Indeed, empirical research shows that redirecting talent from the public to the private sector enabled the rise of China, hence President Trump is positioning America for growth by encouraging labor to flow to the private sector.
It looks like our economic competitor, China, did its own bureaucratic downsizing years ago and have been getting the favorable results for the last 30 years or so. Deng downsized the state apparatus to align more with a dynamic economy rather than a fossilized bureaucracy run by the apparatchiks. It worked well for them and now Trump is taking his turn at streamlining the American economy by jettisoning all of the deadweight of the bureaucracy that he can.