Question:
DOGE has sacked thousands or maybe tens of thousands of Federal Employees. Is that good or bad for the economy?Answer:
It is difficult to be exact about the effects of such mass layoffs of federal employees (although some people have had their jobs reinstated). First, if as DOGE claims, many of these people were not especially productive or important, then laying them off should not hurt the economy. If anything, the salary savings, which can amount to more than a billion dollars, can be used towards more productive activities. I suspect, though, that most federal employees were performing important functions and once they are gone, the provision of government services (think IRS helplines, DMV lines, National parks maintenance, etc.) will suffer major harm. Bear in mind that the combined salaries of federal employees is merely a drop in the bucket for an economy the size of the US. As such, salary savings from firing such employees will unlikely make a dent in the size of the government budget or the national debt. One benefit I can see is that many of these employees will end up finding jobs in the private sector which is perennially looking for well-trained and qualified candidates.
