On Reduction of Federal Agencies

Paul Stivers, 3/25/2025

Reduction or removal of federal agencies is not a new idea. Here is a 4-minute excerpt from Phil Donahue's interview with Milton Friedman in 1979. Milton Friedman was a renowned American economist and Nobel laureate active during the 1950s-1980s. He was an advocate of free-market capitalism and limited government intervention.

Milton Friedman On Government Agencies

In this interview, Friedman recommended the following for federal agencies.

Abolish entirely:

• Agriculture
• Commerce
• Education
• Housing and Urban Development
• Labor
• Transportation
• Veterans Affairs (Make lump sum payouts to veterans, then discontinue.)

Abolish most of:

• Energy (Move a few things under Department of Defense.)
• Interior (Sell off most of the land owned by the US Government except for the land that the government buildings are on.)

Abolish half of:

• Health and Human Services

Keep:

• Defense
• Justice
• State
• Treasury (to collect taxes and pay the government's bills)

Friedman believed that the fundamental functions of government are to preserve the peace, defend the country, and provide a judicial system to its citizens. After that it should stay out of the way. He pointed out however that reforms to get back to those essentials should not occur without a mandate from the people. Many would interpret the outcome of the 2024 presidential election as having provided that mandate.

There is the counter argument that every federal agency was set up to fulfill some need. Friedman believed that many of those needs, if justified, could be fulfilled by state and local governments or private enterprise.