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Wednesday, May 12, 2010

Incentivize Spending Cuts ???

We need a mechanism to incentivize spending less.

I see it all the time. Money allocated to a program takes some creative action some times to be completely spent. When asked why not just give it back or not spend it, I’m told a couple of things.

1. If we do the money will just be spent on something else and at least this way we’ll know how it’s spent.

2. If we show a surplus then we will be docked that amount next time they give us money and we can’t have that.

Has anyone ever seriously tried to come up with a way to promote departments saving money? Incentivize the process? I’ve blogged before about the need for such a plan but couldn’t come up with one.

I just got an email about a Mackinac Center blog on state employee pay growing 25% over inflation. The interesting thing that brought this idea of mine up was that while the government was paying out 25% more to the employees overall, the state employee work force had shrunk.


To me that meant that employees were getting cut while budgets were getting bigger. That told me that cutting services does not cut spending by the government. It told me that no matter what, the job of the bureaucracy was to get more money regardless of need. See # 2 above.

The sub headline of the Mac Center article read; Total Payroll Up $1.5 Billion Despite Fewer Workers.

That sub headline told me also that if the government unions were worried about hiring more people they would of found a way of doing so with that extra five Billion instead of whatever they did with it. I’m sure some of that was due to hopefully efficiencies of processes making some jobs obsolete but it makes me wonder.

I called up Ted O’Neil at the Mac Center to see if they had done any thinking along those lines. They hadn’t, however Ted brought up the idea that when government makes the rules for giving out money to private industry, he offered roads as an example; they put in rewards for being ahead of schedule and penalties for coming in behind schedule. I also assume that employees that helped made that happen stood a chance in sharing in that reward. He did think that it was odd that government didn’t do the same for itself.

I was thinking maybe he was catching my point. He did say that he would bring it up when they did their brainstorming thing. (“thing” being my word as it is much too trite for a think tank LOL)

Privatizing government functions is not a panacea only a useful tool.
Let me flush out what I’m thinking of doing. It has to do with embarrassment. Hopefully not mine – but you can be the judge.

It seems to me that any plan in order to work will have to come from the Bottom Up. What if I was to set up a bank account strictly for the national debt? Then each week I would put in a dollar. In one year I would have collected $52. Ok, pretty stupid huh?

What about if this idea went viral? What if others started putting in $1 cash a week then gathered at a local spot to collect the cash and have a big shot count and put it in another bank account? So far not much traction except some people might start to feel like they have some skin in the game. (The Big Shot would or at least he would tell everyone he or she did – and that’s fine in fact that’s the idea).
That “skin” is the key. If I commit to $50 a year to pay down the debt especially with cash that people can touch see and feel combined with a public display; well some politicians might get on board. With enough public pressure perhaps the bureaucracies could be embarrassed enough to donate some.

I know -- I’m the one feeling embarrassed. Oh well what’s new? I want people to get involved in government and get some skin in the game. However that can happen I’m for. If the citizenry is willing to bite the bullet to get spending under control, they will probably find it rewarding to vote out people who think otherwise or try to tell them they’re “skin” is stupid.

Here is another idea. What about using the same citizen savings idea and get the politicians to pass a law that the government will match dollar for dollar the private contributions. By the way I would make this collection a private thing and hopefully talk the banks into setting it up pro bono. God knows they could use the good pr.

Get some really big names at whatever level to oversee the process again on a pro bono, good publicity or public image basis. The trick would be to have this law somehow make sure the matching government money would have to come from reductions in funding or spending. Taxes could not be raised to offset the cost. I would envision an across the board type of cut to minimize the threat of service suspensions to thwart the plan.

This even if and when it started would not amount to a lot when compared to the national debt. The biggest benefit would be to give the people putting in their “skin” a perfect object lesson in how large a million or a billion or a trillion really is and how massive the problem really is so they might get mobilized to put into office people more willing to cut government.

Kinda of a back door grassroots driven spending cut.

The real key is that something like this can show in black and white how basically simple the solution to this complex problem could be.

I know this is embryonic in nature. Or you might think, not well thought out. I agree, but that is the point. I’m not in a think tank. What say you Mac Center? Let me know how crazy I really am. Work with me on this.

Regards, Live Dangerously Be A Conservative