A Simple Government Fix – Eliminate States & Almost All Federal Agencies



By Charles Biderman


Over the past year I have been quite critical of our current form of government. My recent rant that governments are incapable of effectively providing services such as education and health care, was not the first time that I have said these things.


So while it is much easier complaining about the way it is, here are my thoughts as to how to fix the mess. But before the restructuring part, let us go back to the Declaration of Independence and let me state that I agree that all of us are entitled to the inalienable rights of life, liberty, property and pursuit of happiness. Notice I added “right to property” which originally was in the Declaration but was removed and pursuit of happiness was added. I think human beings are entitled to both.


Therefore to me, in line with our inalienable rights, the new government should not make laws that prohibit individual pursuit of happiness, with the key caveat that such pursuits do not harm others, and is limited to adults. That means no laws against self-destructive behavior such as drugs, alcohol, tobacco, etc. That does not mean we should not try and educate and inform about self-destructive behavior. But no laws against private pursuit of happiness. Particularly government should make no laws against personal pursuit of sexual happiness, as long as it is between consenting adults.


What is more, if I were dictator in charge of restructuring the government, I would want to start with a clean slate. Therefore, I would start by eliminating almost all existing government bureaucracies. This might seem very radical to some of you, but this is only one man’s opinion, mine.


For example, my first move would be to eliminate all the 50 states employees and legislators. States were necessary at the start of the 1800’s when we were a horse and buggy society when it would take several days to ride from New York City to Albany and a week on horseback from LA to San Fran. But states are not geographically necessary today. We do not need states as a very fat layer of middle management between the Feds and local government All the money that went to the states would instead go local. All services provided by the states would be provided locally.


Special interest groups control all the major Washington bureaucracies. Therefore to eliminate special interest group control, I would eliminate almost all the US cabinet positions and jobs with the exception of Treasury, State and Defense. And yes, I would appoint myself, head of real time economic data after eliminating the Departments of Commerce and Labor and the Census Bureau.


Those state and federal government employees losing their jobs would be entitled to previously approved entitlements if they work for an additional 12 months to help in the restructuring of how their services get provided.


OK. Now that I have in essence eliminated virtually all government bureaucracy, here are my current thoughts as to how we can effectively provide three services, education, health care and the post office. For starters I would keep essential services such as police, fire, water and sewage services at the local level – with a key caveat that entitlements need to be restructured.


First education. At the start of the 12 month changeover, I would have each and every local board of education begin an on line and in person community dialogue to create a consensus about the cost and content of local education. Particularly I would require that all local government activities, results and conclusions are available online for all constituents to see and comment upon. I say to be effective government services need to be local and be totally transparent. That includes salaries, benefits and third party service contracts. If you work for the people, the people are entitled to know everyone’s salaries, benefits and deal terms.


Similarly with health care. Each community, maybe the same size as each board of education or perhaps a larger geographic entity such as local television station coverage, would have conversations seeking consensus as to wellness care. Keeping people healthy is much cheaper than the current system of huge overhead costs for dealing with illness. Each community would in essence determine how to spend all the health care dollars available that had been going to the states and federal government as well as individual medical insurance coverage.


To monitor all this I would also recommend each community appoint a grand jury of citizens with subpoena power to monitor local services as to misfeasance and malfeasance. Misfeasance and malfeasance are fancy words that means doing a bad job either inadvertently or on purpose.


Then there is the post office. Rather than shut it or sell it to Fedex and UPS, I would privatize it and make the Post Office a public company. Every post office address would get 10 shares of stock in the new entity. The US government would eat all the past debt and be liable for all current worker entitlements based upon the past.


But after the privatizing date all salaries and services would be up for grabs. The new private post office would be allowed to shutter any location they want and change stamp prices and services at will.


Those are my thoughts. If you can come up with a better solution, I would love to hear them. Let the conversations begin.


Charles Biderman
President & CEO TrimTabs Investment Research
Portfolio Manager, TrimTabs Float Shrink ETF (TTFS)



9 Responses to A Simple Government Fix – Eliminate States & Almost All Federal Agencies

  1. George Sachs on November 16, 2012 at 5:58 pm

    there is no doubt a long list of what needs to be done. i myself would start by implementing things to try to grow ourselves out of the mess, as follows:

    1. the fed monetizes half of each individual’s debt.
    2. we require that in three years everything individuals and corporations buy must be manufactured here.
    3. we restructure all government entitlement programs.
    4. we initiate a “manhattan project” on becoming energy independent asap.

    some other things –
    1. we outlaw labor unions for government employees.
    2. we restore glass steagall.
    3. we abolish the fed and fdic.

    • big mac on December 10, 2012 at 6:10 pm

      Right. Just replace “their” thugs/cronies with “our” thugs/cronies…

      2. Compel buy USA
      4. Industrial Policy to favor spending on energy independence
      5. Death penalty on favor of “any kind”

      Tell me that last one wouldn’t get abused to conduct a witch hunt to “clean house”. For how this works search out Saddam Purges Government (presumably for “corruption” charges) on youtube.

      I’m all for drastically cutting back government, as I think that is the root of massive corruption. But, let’s not over-react and replace it with something prone to an insane level of corruption and abuse.

      Biderman makes some interesting proposals…let’s talk about what makes sense out of that and what is really doable.

  2. George Sachs on November 16, 2012 at 6:02 pm

    forgot two –
    4. we abolish lobbying.
    5. we apply the death penalty to any government official accepting a favor of any kind.

  3. Jerome on November 16, 2012 at 10:21 pm

    It is a good idea to get rid of all the federal government beuracracies, they are inefficient and unnecessary, I know, I work in one. The Federal Government has really overreached its proper bounds trying to regulate anything that they can claim effects the country as a whole. The federal government could provide essential national services at 1/20th the current size.

    I would keep the States. Most services that the federal goverment wastes money on can be better accomplished by State cooperative agreements. Keeping the States retains competition that the Federal goverment does not perceive, thus leading to wasteful growth to win election. People and businesses can move between States and pick the State that has the most successful structure (i.e., lowest taxes and least beuracracy), or the moral values that one prefers.

  4. lushfun on November 17, 2012 at 5:11 am

    I think you are wrong, without states the tyranny of the majority would be absolute and people within states wouldn’t be able to withstand or nullify any federal authority at all.

    I am all for abolishing fed agencies and eliminating the budget but I see states as a barrier for federal power a sort of balance of power between national and local if you will. While a municipality may bend states have far more ability to withstand national pressure or “incentives” that force them to marsh to the federal tune.

  5. Dan King on November 17, 2012 at 11:10 pm

    This video is just dumb. First, it’s a Utopian vision which has no chance of becoming reality; second, it is chock-full of unintended consequences, the sum of which would be disastrous, and third, it defies human nature.

    But I do agree with the sexual liberty part–check out my new book–Hookernomics–available on Kindle.

    • Ed_B on November 23, 2012 at 11:16 pm

      Actually, Dan, it is not a dumb video. This is a video meant to provoke our thoughts and to lay them open to charges of being “dumb” as others mull them over. Charles is clearly saying, “here are some ideas for openers. What are your ideas?”.

      As for my own ideas, I also would keep the states because we need these 50 laboratories dedicated to discovery of efficiency and services that apply specifically to the area in which we live. A single national government would have a strangle-hold on all US citizens that is even worse than it is currently. I would, however, be open to rearranging the states into autonomous regions of similar geography and needs.

      I would also favor a return to strict constitutional government with the one exception of allowing ALL adults 21 or over who own property to vote. Private property is a measurement of productivity and it is this that funds the government. There is no reason why those who do not fund the treasury should have any say whatever in how it is spent.

      I would bring about 90% of US troops home and have the US Army and Marine Corps put on the US borders instead of all over the world protecting those who are not supporting them financially.

      Glass-Steagall was not broken and there was no need to “fix it”. It should be reinstated immediately.

      I would also put business on notice that hereafter there would be ZERO bailouts and an end of “too big to fail”. Any business that is too big to fail is also too big to exist. Break them up into smaller units and any of them that are poorly run can go through bankruptcy. The US has the best bankruptcy of any nation, so let’s use it as is appropriate.

      I would also eliminate the FDIC and allow private insurers to insure the savings of bank customers. Insurance companies are numbers oriented, so if a bank was not running their business conservatively, their rates would be higher than other banks that are.

      End the Fed? Sure. There is no reason why a private corporation should decide what the cost of money is. The free market can and should do that. We survived nicely for almost 125 years without a central bank and can do so again.

      I would also make a law that orders all illegal aliens to depart the US for their home countries. Any who remain after a grace period would be rounded up, deported, and barred from ever returning. Those who leave voluntarily can still apply for residence and / or citizenship but they must go through a vetting process and not crowd in ahead of others who are complying with current US immigration laws and procedures.

  6. Tom Sullivan on November 19, 2012 at 7:28 pm

    We simply need to return to limited government and living within our means. The federal vote-buying machine has run out of other people’s money. States protect us from federal tyranny become all-pervasive and all-powerful.

  7. Tom on November 23, 2012 at 11:58 am

    Keep the states and substantially reduce federal government.
    I can understand your position, CA is out of control, and that it why I moved to live-free-or-die, NH.

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Charles BidermanCharles Biderman is the Chairman of TrimTabs Investment Research and Portfolio Manager of the TrimTabs Float Shrink ETF (TTFS)

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Mr. Charles Biderman is an associated person of Trim Tabs Asset Management, LLC, an SEC-registered investment adviser. All opinions expressed by Mr. Biderman on this website are solely those of Mr. Biderman and do not reflect the opinions of Trim Tabs Asset Management, LLC, Trim Tabs Investment Research, Inc., their affiliates (collectively, “Trim Tabs”), or any other associated persons of Trim Tabs. No part of Mr. Biderman’s compensation from Trim Tabs is related to opinions which he expresses on this website, elsewhere on the internet, or in any other medium.

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