Money controls nigh everything in our society, and by virtue of that our government. Yet due to the corruption and cronyism that pervades our public functions, our government spends nearly $4 trillion every year on what it bills as “essential social services” yet in practice wastes fortunes on things that primarily benefit special interests. Of what social services we receive in return, they are rife with waste and fraud.
With $41 trillion inflation-adjusted dollars spent by the federal government alone over the past 10 years - equivalent to a half million dollars for every family of four in the nation (which bought us what, exactly?), it pays homage to what we discussed in Chapter 11: that the abysmally low value of the services provided by the federal government is akin to walking into a diner, being made to pay $25,000 for a cheeseburger and feeling lucky if it has either cheese or a bun.
The Alliance Party's platform of transparency within streamlined government and reducing society-wide costs by way of Universal Energy is directly designed to target this deep-seated problem. And in doing so, it gives us the opportunity to operate government far more efficiently and at a much greater value than it works today. This is intended to free up revenue to reinvest back into our society alongside a multifaceted budget policy that allows us to make critical social investments while paying off national debt, overhauling federal budgets, federal spending and federal taxes along the way.
We plan to accomplish this goal through several measures we'll discuss this chapter, starting with budgets, revenues and expenditures.
Budgets, Revenues and Expenditures
The consolidation of government functions in our Government 2.0 model for public service reduces government redundancy on large scales, to the extent where saving trillions of dollars becomes a possibility. But rather than fund government as it wishes and then see what’s left over at the end of the year to pay for extra services and programs (or principal on the national debt), the Alliance Party proposes we do the opposite.
This means we determine exactly how much it costs to run government at an efficient standard, then collect revenues at a calculated rate that, by design, leaves enough money afterwards to fund additional programs like Universal Energy, national infrastructure and paying off debt. To illustrate how our approach would work at the federal level, let's take a look at the federal spending for fiscal year 2013:
As you can see, the federal government spent a total of about $3.5 trillion in 2013. In doing so, it only collected $2.8 trillion in revenue - meaning it spent roughly $700 billion more than it raised. This is “the deficit” we hear so much about when federal budget bills are being debated. Yet the political bickering about taxes and spending has ignored the ultimate point: the federal government has been operating at a loss for years (largely due to the cost of our wars) and our country is now $19.5 trillion in debt – a figure that increases annually.
We do not make payments on the principal of this debt (the total amount owed). We only make payments on the interest (the amount we pay to borrow money). In 2013, we spent $221 billion on interest payments, and will spend $230 billion in 2015. That's money that goes out the window as our debt continues to increase. As interest rates rise alongside an annual federal deficit, however, these payments are expected to grow in the short-term future. According to the Congressional Budget Office, interest payments on the national debt will reach $480 billion by 2019, and $720 billion by 2024.
You don’t need a master’s degree in economics to realize that this is unsustainable, and the Alliance Party’s approach to budgets would recognize this explicitly through the emphasis of a single principle: raise more money than we spend.
That statement would be trite in today’s government, but this model does not account for, nor tolerate, the existence of political hackery. If we want a government that works, financial solvency is critical and that requirement needs to be given higher priority than ideological cheerleading, cronyism and bruised egos. Mindful of this, the Alliance Party would put forth a budget policy based on the following criteria:
Operation at a short-term surplus, and at zero deficit thereafter. Government must raise more money than it spends in the short-term, giving us additional funds that we can use to pay off debt and invest in much-needed social improvements. Our surplus revenue target depends on a series of factors that are explained below.
Caps on spending. Our budget would limit funds to functions of government through spending caps that each is expected to operate within - barring emergencies or a transparent and well-reasoned justification to increase it. The rest of us have to operate within a budget limit for our lives, government can and should as well. These conceptual caps, as approximate numbers that would be adjusted for future inflation, cover the following areas:
Military. Today, our total military spending is around $1.1-$1.3 trillion every year. That figure includes roughly $600 billion for the Department of Defense, $170 billion for Veterans Affairs services, $150 billion for additional security and intelligence functions (Department of Homeland Security, National Intelligence Program, maintaining our nuclear arsenals, etc.). And as much as 80 % of our national debt is due to war, that's another $180 billion.
This expenditure dwarfs the rest of the world even if we only consider the ~$600 billion defense budget, which is half of our total military spending. Any effort to scale this back is decried as “weak on defense” by politicians in the pocket of special interests engaged in war profiteering, but that's only one angle to this problem. The real reason we spend so much money on the military is because much of our economy is geared to build weapons and the military is the single-largest employer of Americans.
The Alliance Party believes we can stand up to our adversaries and destroy our enemies without going bankrupt in the process. We believe large numbers of active duty soldiers and unemployed veterans would be happy to hang up their uniform for a well-paying career building the next-generation technologies America needs for a prosperous future. We also believe we can focus our military towards actual threats, not involving ourselves in unnecessary wars that cause more harm than good.
But none of this will happen until we can bring our military spending back to reality.
Through several measures detailed in our Government 2.0 model for public service and approach to defense and security, our budget model places a spending cap of $300 billion on military efforts. This is $100 billion more than Russia and China combined, and of the 17 top defense spenders worldwide, all but two are our allies.
Interest on loan debt would be paid separately, and Veterans Affairs health services would be absorbed into the National Health Service.
Discretionary Spending. “Running the government” is what we think when we hear Discretionary spending. Roughly 50% of it is devoted to the military, with the rest on functions like NASA, the Department of Justice, Food and Drug administration and so on.
Through our streamlined Government 2.0 model for public service, we intend to restructure government operation to be more consolidated and efficient. Furthermore, we also intend to refocus its priorities towards our actual needs as a society, forsaking wasteful and failed ventures like the war on drugs and inappropriate foreign subsidies.
Presently, the Non-Defense Discretionary Budget is $585 billion annually. 21% ($123 billion) of that is healthcare services that would be absorbed into the National Health Service in our model. That leaves $462 billion remaining that we believe we could cut 35% of through consolidation and efficiency improvements, coming to a budget cap of $300 billion.
Mandatory Spending. Mandatory spending consists of major federal healthcare programs (Medicare, Medicaid, Veterans Affairs), Social Security, income security programs (unemployment, food stamps, etc.), retirement programs for retired federal employees and other programs such as disability, agriculture subsidies and child tax credits.
According to the Congressional Budget Office, mandatory spending is roughly $2 trillion annually ($2.3 trillion with $305 billion in offsetting income from fees on natural resource extraction). Of this spending, $861 billion is for major healthcare programs, with $668 trillion going to Social Security, which in our model would be funded as a separate, standalone expenditure.
The remaining money is spent as follows (using approximate figures):
$140 billion: disability insurance
$340 billion: income security programs (unemployment, earned income tax credits, food stamps)
$153 billion: federal civilian and military retirement
$80 billion: veterans benefits (the $180 billion VA cost is compiled from several sources)
$95 billion: other programs such as housing and agriculture subsidies
Total: $808 billion.
We plan to reduce mandatory spending to an annual budget cap of $400 billion through the following approaches: streamlining federal services while reducing waste. Strenuously investigating fraud and misuse of disability insurance and unemployment. Ending tax credits that encourage people to have more children and inappropriate agricultural subsidies. Consolidating food and income assistance programs and focusing them only on the truly needy. Incorporating veteran's benefits into the National Health Service.
Most importantly in the context of unemployment and welfare, we plan to dramatically increase the demand for jobs by investing in Universal Energy and next-generation infrastructure - which in effect would dramatically decrease the number of people requiring unemployment and welfare assistance.
Lastly, the Alliance Party would seek to cease offering pensions to federal employees and instead provide matching 401(k) contributions. We would also seek to have existing pensioners voluntarily agree to roll their pensions into 401(k) funds through incentives including lump-sum compensation, immunity from income tax for a set time period (or life) or offering lump-sum payments to their children on passing. Over time, this would work to reduce the burden of public pensions at the federal level while ensuring current pension holders are compensated as promised.
Single-payer healthcare. As a core measure of our platform, the Alliance Party would replace Medicare/Medicaid/CHIP/Veterans Affairs and their trillion dollar+ annual expenditure with a nationwide single-payer healthcare framework through the National Health Service. In this model, healthcare is primarily paid by tax revenue, and one wouldn’t have private insurance unless they wanted platinum-level care (which would still be cheaper than what insurance costs today for most people).
In the United Kingdom's model, which is considered best in the world by the World Health Organization as of 2014, they pay $3,405 per person. Applied to our country, this comes to $1.1 trillion. Adding in a 25% buffer for unforeseen costs, the Alliance Party would cap healthcare spending at $1.375 trillion annually, or around $4,250 for every person in the United States - which would put this at the higher end of most single-payer healthcare programs abroad and the already-present cost of Medicare and Medicaid today.
To facilitate this approach, the National Health Service would include several measures that would forgive student loans for all medical professionals that worked for the NHS up to a fixed amount ($250,000 or greater). We're serious about making healthcare affordable, and are willing to do what it takes to see that result delivered.
Social Security. In this model, as a “trust” funded program, Social Security is paid outside of the federal budget through a separate tax on income as it is today through FICA, and would not be included in the budget at all. In short, what goes into Social Security comes from Social Security taxes, and what goes out only comes from Social Security taxes, which are raised or lowered to maintain long-term solvency. If people require living stipends beyond that, special assistance would be provided under more transparent and stringent accounting standards outside of federal mandatory spending.
All combined these caps put an annual budget limit of $2.375 trillion for federal government functions (excluding social security), adjusting for inflation in future years.