How do you think Palace Chase and VSP approvals will affect USAF Squadrons?

It's a double edged sword. There are some really good guys getting out that are just tired of the stuff and that is really going to hurt some of the workcenters. On the other hand, the VSP is paying some of the less than stellar to quit mucking around and get out of the way of people that still love this life. There will be pain but sometimes losing 1 person is actually a gain.
Overall, the AF is going to move on and still be the best AF in the world. Eager people will make sure we don't fail.

It's going to hurt. Traditional periods of contraction like this always hurt. Naturally AFPC cuts too deep placing additional burden on operations squadrons. In time barring any major engagements things will balance out. In the meantime we must understand and do our best to mitigate the negative effects highlighted by Capt Hooper and so many others.

I've already seen major complications with the VSP. I am a C-17 pilot and decreasing the amount of pilots in our squadron puts a bigger burden on the rest of us to continue doing to same amount of work with less people.
Also, our mission tastings are not going to change. So, we are going to have less qualified crews trying to operate the same amount if missions. So we will be away from the office longer and won't be able to do the office duties we already have too much of. Not to mention, we will be away from home more which is hard on the families.
Lastly, our school-house is losing a lot of experienced Instructor Pilots, so our training is going to be given from less experienced pilots. And the experienced Instructors in the squadrons will be pulled to the school-house to fill those gaps, leaving less Instuctors in the Squadrons.
Yes, the AF might be better off without some of the people getting out, but I see more negatives than positives in this situation.