One of the hallmarks of America's entrepreneurial economy is a never-ending quest to reduce bureaucracy. Whole industries have sprung up to make American businesses more efficient while preserving high standards of quality. And improvements in productivity have been largely responsible for the strong economy of the past few years.

How strange it is, then, that our government does not reflect this truly American value. Indeed, despite campaign promises by candidates of both parties to streamline the bureaucracy, the total number of federal employees has hovered between 2.7 million and 3.1 million since the early 1980s, according to the latest Federal Civilian Workforce Statistics Fact Book. As the private sector gets better at doing more with less, the public sector seems determined to take the opposite approach.

Is there a way to check the growth of bureaucracy and to make the federal government reflect America's entrepreneurial vitality? Whenever I deliver a speech to an audience of entrepreneurs, I offer one solution. As a first step, I suggest, we ought to move huge parts of the government out of Washington. Imagine the Interior Department headquartered in Jackson Hole, Treasury in Charlotte, Agriculture in Omaha, and Labor in Detroit, where it could study the effects of unemployment up close. Though I deliver the line in the hopes of getting an easy laugh, I'm only half kidding.

Think about it: From a security perspective, it makes little sense to base our national government in a single city, which, no matter how heavily guarded, remains vulnerable to a terrorist attack. With today's advances in telecommunications, the rationale for concentrating officials in one place is diminishing anyway. In fact, to ensure adequate communication and coordination between far-flung governmental satellites, the U.S. would have to invest heavily in the nation's telecommunications infrastructure. That would have fantastic trickle-down benefits for the economy.

But perhaps the best reason to dispatch government agencies to various corners of America is that it would dramatically increase the contact between "us" and "them." In abandoning Washington's suburban cocoon, government workers couldn't help but learn lessons about thrift and creativity and (dare I say it?) customer service from the entrepreneurs who dominate the civic life of our cities and states. As policymakers got to know their new neighbors better, surely their efforts would reflect a deeper understanding of and empathy for the risks entrepreneurs run, the choices they make, and the impact they have.

Let's say, for example, the Commerce Department moved to Kansas City, Missouri, where the Kauffman Foundation is based. In time, its employees would come to learn how a local company named Garmin made the world a better place by developing new global positioning technology. Or how another area entrepreneur, Mike Brown, has created well-paying jobs in the heartland by in-shoring the management of ATMs that are situated all over Eastern Europe. Or how Sandy Kemper's company, Perfect Commerce, helps its customers, including the government, buy office supplies in bulk at enormous cost savings.

Splitting up the government would have its downsides of course. What would we do with all the federal workers who didn't elect to move with their agencies to new cities? And to whom could we possibly rent all those giant Soviet-style government buildings along the National Mall? But here's one last reason to consider my proposal: With more contact, entrepreneurs would come to realize that, in fact, the bureaucrats aren't out to get them. Federal workers buy groceries and mow the lawn and worry about gas prices and their kids' educations, just like you do. If you want their respect, the feeling ought to be mutual.

Carl Schramm is president and CEO of the Ewing Marion Kauffman Foundation in Kansas City, Missouri, and a contributing editor.