The obvious methodology at work here is 'fire everyone then hopefully re-hire only what is blindingly obviously needed'. There are many, many problems with this approach in a business setting but even more from a governmental setting. The first, and what should be obvious to anyone with an ounce of empathy, is that these are real people who's lives are being toyed with. It isn't like you are trying out a new business…
Anyone with half a brain understands the argument you put forward, and there is not a single doubt on my mind that the current administration does. But the point is not the savings. The point is incapacitating the government to the point where privatization starts to looks like a viable alternative. This has been the strategy since Thatcher and Reagan, look up "starving the beast". This administration is just really…
Privatization is almost always going to be the worst option. If the true cost to deliver a good or service to the people is $X, the government can do the job for $X. A private company will also need $X to provide the service, but they must charge the public well above $X so that they can stuff their own pockets with money. A government's work is providing services, not generating profits for shareholders.