We keep hearing economists and politicians howling primal screams that the Trump/DOGE strategy of downsizing the government will crash the economy into recession. Apparently, government waste is a plus for the economy because it makes the GDP larger.

Really?

Let’s say that Trump and Elon Musk’s cost-cutting succeeds and we are able to ratchet down the government share of GDP from 25 to 20% of GDP.

Will that cause a recession? It didn’t when government spending fell from 22 to 18% of GDP when Clinton was president and we had the peace dividend from the end of the Cold War. The economy boomed.

What Trump is proposing is nothing compared to the biggest government downsizing in American history. That happened after World War II. Paul Samuelson predicted massive unemployment when 10 million soldiers came home due to “massive dislocation.”

In 1944, government spending at all levels accounted for 55% of gross domestic product (GDP), then dropped 75% in real terms, to 16% of GDP.  See chart three years later. There was very little increase in unemployment.

Instead, the government downsizing was the start of the famous post-World War II economic boom with minimal unemployment.

Trump is realigning our economy away from excessive and inefficient government to a new golden age of technological progress and productivity. So cut away, Mr. President. All the economy has to lose is its political chains.