March 3, 2013

(Cutting) Size of Government

Determine the Max % of GDP that can be Government sector per popular mores...(1)

For each Category of Gov spend (Defense, Education, Food, Corporate Employment Assist et al), determine moral allocation of 1) per public opinion...(2)

Convert the figs in 1) and 2) to absolute dollars.

Now, in each Category:

The oversize is represented by:
(Actual Spend/Morally Allocable Spend)*(Actual Spend/Value of the benefits received by intended beneficiaries). This figure carries the excess moneyspend as well as excess procedure, hierarchy and hardship faced by the intended beneficiaries in the process.
It represents the Keynesian component/crutches in running the private Economy - that need to be dissolved, slowly, if not fast.

Much care needs to be taken in estimating the 'value of the benefits received by intended beneficiaries'. The value of Education received in 50 children classrooms is not the same as in 20 children classrooms. Again, a wholesome education providing exposure to music and arts is more uplifting than indiscriminately plunging every kid into the full heat of grueling Math or Spelling Bees.

Actual Spend includes spending thru the tax code = tax shields that an industry or company or individual receives that are NOT received by those that do not qualify for it.
Child tax credit, mortgage interest deductions are all spending, so are the payments to personnel employed to administer/distribute the spending. Payments to shared personnel need to be allocated over the involved Categories.

Credible Plan to bring the compound ratio down amounts to cutting the Gov. This has no reference to taxation or deficit, which are but means to fund or cut Excessive Gov, dependence, and procedure & playbook bottlenecks.

The funding choice and which direction to take the Tax-Deficit split is a separate decision in itself. This blogger further contends that the tax code should be mildly progressive from the very start of taxable income spectrum, not suddenly wake up to progressivity at $250K or 400K or some such progressivity threshhold. It is about equitably funding Governance, not being a sadist to the successful. Only the artificial maintenance of the wealthy and successful in their spot needs to go.

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