Investing.com -- The inefficiencies and red tape in government have been used as political piñata among some Republicans, but Macquarie dispels some of the perceived inefficiencies and believes that another Donald Trump administration would struggle to boost efficiencies.
"While Trump could reduce federal red tape, he has a limited control over states, and benefits of deregulation might be offset by higher immigration, trade, and geopolitical vols," Macquarie analysts said in a note.
The report comes as many on the Republic side have been vocal about trimming excess spending and regulation.
Macquarie, however, pokes holes in claims that the government in overstaffed, pointing out that thenumber of federal civilian employees has remained unchanged at 2.9 million since the early 1980s, despite a surge in the U.S. population. The number of federal employees per 1,000 people has dropped from 12.5 to 8.5.
Recently, Elon Musk vowed to cut US $2t rillion from federal spending, Macquarie added, but the US is already operating one of the smallest governments, spending around 38% of GDP versus 45% to 55% elsewhere.
The real burden of red tape, or bureaucracy, has occurred at the state and local levels, limiting the ability of Trump to rein in it.
The federal government has issued over 4,000 laws and 100,000 rules since the mid-1990s, but these pale in comparison to the dense network of local rules.
Even "red states" are highly regulated, with Texas having about 300,000 rules and restrictions, and Florida approaching 200,000.
Macquarie also pushed back against the idea that the U.S. business climate is excessively "smothered" by federal regulations.
"Not only does the federal government have a relatively small footprint but private sector's vitality and innovation continues to flourish across US."