The implicit assumption that this is a bad thing is grounded in the assumption that anyone who is a STEM PhD is automatically someone the US government should want to employ, which I don't think is true. Academia is a badly broken system, and many people with formal credentials like PhDs have wasted huge amounts of time and effort on producing what is ultimately low-quality scientific work. This is a pretty uncontrov…
The tail of the distribution justifies the entire distribution. I agree that a large percentage of PhD research is inconsequential, but a small percentage is massively consequential. It’s ok to whiff on a thousand STEM PhDs if you pick up one Andrej Karpathy (for example).
Maybe this is true for academic institutions granting the PhDs (although even this I am skeptical of, training a PhD costs a lot in terms of time, money, and human effort). But that doesn't mean it implies that the federal government needs to employ a thousand STEM PhDs just to get someone like Karpathy - indeed, Andrej Karpathy does not work for the federal government! He made his name working in the private sector!