DOGE: Efficiency Requires Elimination

Yesterday, Scott Bessent, the Treasury Secretary, said that DOGE was about government efficiency, not government elimination or extinction.

One way of interpreting Bessent’s words is that the Trump administration doesn’t want to eliminate whole federal government functions or programs, it just wants them to be delivered at lower cost by eliminating waste and bloat, making them more cost-effective in delivering on their current aims.

Really? I doubt Bessent actually thinks this. Was the problem with government DEI programs that there was just too much waste and fraud; that they weren’t cost-effective enough in making sure workplaces were actually diverse, equitable and inclusive?

No. The Trump administration had an ideological problem with their existence. In their mind, ridding the federal government of DEI entirely was a worthy goal, because this was non-priority and wasteful activity that, by making the federal government less meritocratic, worsened the quality of the state in delivering on other core functions.

And that’s the point: to deliver truly efficient government, in the broader economic sense of minimizing the distortions government creates, one needs to first determine what government should be doing and then downsize it to eradicate superfluous functions and objectives. Fail to “eliminate” many of the non-essential programs or goals and you’ll end up with a host of inefficiency baked in, not least because the federal government currently has so many competing aims.

As Alex Nowrasteh and I wrote earlier this year:

if DOGE tries to tackle surface-level inefficiencies [like waste and fraud], it will miss deeper problems that can only be eradicated by limiting the government’s role to its essential functions.

Consider federal subsidies. The government funds drug and vaccine research to improve public health, but also erects regulatory barriers that delay or discourage these treatments from reaching the market, creating “invisible graveyards” of drugs that could work but don’t have formal approval. The federal government likewise subsidizes solar panels and electric vehicles to reduce carbon emissions, but imposes tariffs on the same products, which deter decarbonization. Working at cross-purposes means goals aren’t achieved and consumers pay higher costs.

Infrastructure projects highlight similar contradictions. The federal government wants highways, bridges and public transit built quickly and cheaply. Yet federal environmental rules delay projects, while sweetheart provisions for trade unions and tariffs on construction materials such as steel make delivery more expensive. Affordable housing programs aim to increase the housing supply, but laws like the Endangered Species Act and wetland protection measures restrict where development can occur.

These conflicting functions often have negative fiscal consequences. Disaster relief programs offer aid (often to relatively wealthy households) after hurricanes or floods, but federally subsidized flood insurance encourages risky construction in high-danger zones to begin with. This increases costs to all taxpayers by making the need for aid more likely.

Subsidies also induce overproduction of crops like corn and soy — key ingredients in unhealthy foods. At the same time, the government pays other farmers to grow less, taxes Americans to protect politically favored produce and then spends billions on nutrition programs to promote healthier eating. Trump’s nominee for Health and Human Services secretary, Robert F. Kennedy Jr., recently criticized high-fructose corn syrup in American soft drinks But it is used because tariffs make cane sugar prohibitively expensive for U.S. manufacturers.

You can’t eradicate inefficiencies caused by counter-programming through better management, AI or even regulatory simplification. The only solution is for the government to pursue a few clear, constitutionally enumerated objectives – and drop everything else.

Milton Friedman once said: “The tragedy is that because government is doing so many things it ought not to be doing, it performs the functions it ought to be performing badly.”

I agree with my colleague Chris Edwards and disagree with Bessent: DOGE should be DOGEE - incorporating"efficiency and elimination.”