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How the US Government Can Fix Its Financial Problems

In March 2011, the US General Accounting Office (GAO) released a report to Congress entitled: “Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue”. (www.gao.gov/new.items/d11474r.pdf) This report outlines many of the biggest opportunities that the GAO identified for eliminating redundancies and duplications of effort among agencies, departments, and programs of the United States Government. Many billions of dollars in annual expenditures in waste are identified – some more specifically than others. Some examples from the report include:

  • Food Safety – 15 Agencies
  • Warfighter Support – 31 Entities within the US Department of Defense (DOD)
  • DOD Information System Installation / Upgrade Programs – 2,300 Programs
  • Economic Development – 80 Programs
  • Surface Transportation – 5 Agencies, Over 100 Programs
  • Federal Emergency Management Agency Oversight of Grants – 17 Programs
  • Domestic Food Assistance – 4 Agencies, Over 20 Programs
  • Assistance for “Transportation-Disadvantaged” People – 8 Departments, 80 Programs
  • Employment & Training – 3 Departments, 44 Programs
  • Teacher Quality – 10 Agencies, 82 Programs
  • Financial Literacy – 20 Agencies, 56 Programs

While the report is unable to provide a meaningful estimate of the combined savings achievable here, it does point out that the savings from individual recommendations can range from millions to billions of dollars. Without doubt, the savings achievable would amount – in total – to hundreds of billions of dollars. It would move the United States solidly back toward a position of financial solvency and strength, and by doing so, stabilize world markets to a large degree. And yet it is not done. Election cycles come and go, and no meaningful reform occurs despite the promises of individual Presidential and Congressional candidates. Once in office, they are never held to account for their earlier campaign promises. How do they get away with that? For the most part, they simply blame the lack of action on their opposition – Democrats blame Republicans, Republicans blame Democrats, and they individually prosper while I aggregate our nation’s economy continues to swirl deeper and deeper into a proverbial toilet bowl of deficit spending and debt.

The recommendations of this latest GAO report will not be followed either, for three broad reasons:

  1. The first reason is that the United States Government, especially the United States Congress, is so politically divided and self-interested that they are fundamentally dysfunctional. They are unable to move in unity toward a common goal without the galvanizing effects of a tragedy such as 9/11, which pushes back the otherwise unassailable sea of discord that envelops Congress. Certainly, we see that in the regular budget battles that threaten to shut down US Government operations with such troubling regularity.
  2. The second reason is that the US Government is not organized in a manner that enables it to reorganize itself and streamline itself the way a corporation can. In truth, based on well over 30 years of personal involvement in such activities, I can state with authority that the larger an organization is, the more challenging a streamlining process becomes. This action requires a degree of centralized authority that simply does not exist, even within a single branch of the United States Government. As a really obvious (if somewhat simplistic) example, why doesn’t the United States consolidate the branches of the US Armed Forces? Does the Army really require its own Air Wing? Does the US Navy really require it’s own Air Wing? And yet the various branches of the US Armed Forces are duplicated at every level of management all the way up through the Joint Chiefs of Staff. The levels of redundancy and duplication are incredible and incredibly obvious. Yet who has the authority to alter this situation and consolidate them? The answer is – from a practical standpoint – no one does.
  3. The third reason that recommendations such as those made in the GAO Report will not be implemented is that they approach this problem in the wrong way. To leave these various superstructures in place and attempt to reduce the level of duplication and redundancy among them is patently impossible. No more than a small fraction of the recommendations will ever be attempted, and a smaller fraction of those that are attempted will ever be successful. To reduce expenditures in this manner is like trying to cut off the tail of a dog one inch at a time. After the first inch, either the dog or the veterinarian is unlikely to survive the procedure. Entire departments and agencies must be completely eliminated in order to achieve real consolidation. This is the only approach that can possibly achieve the levels of reduction in Government waste required to achieve any level of real efficiency.

In a future Blog entitled: “Where are All the New Ideas?” I will outline a superior approach that really does have an opportunity to be successful if it is implemented – much less “inch-at-a-time”, and much more “eliminate the entire department”. However, before undertaking the steps outlined in that missive, the first two problems must be resolved.

I believe the first two problems cannot be resolved; they must be circumvented. Based on decades of observation, I do not believe that the self-interest and general myopia of US congressional leaders can be overcome in a way that brings about the sweeping consolidation and efficiency required by the United States Government. If Thomas Jefferson were alive today, he would likely recommend another American Revolution, overthrowing the current system and replacing it with a more responsible one. Personally, I don’t know whether the United States could survive such a cataclysm but I am reasonably certain that the chaos that would ensue around the world as a result would be devastating on a global scale, at least among 1st World economies and countries. And so setting that alternative aside, how could the United States centralize enough power to make these types of sweeping changes irrespective of individual or party-based agendas?

The way in which these two problems may be circumvented is the establishment of a temporary committee (Notice that I said a TEMPORARY committee) for that purpose. The staff members of the committee would be drawn principally from the GAO, but committee leadership would be comprised of 3 members, with all decisions made by simple majority. The committee would exist for 18 months, and aside from administrative support, would be comprised of no more than 30 members. It would present its final report directly to the President of the United States, and act with complete independence and impunity. During the first 6 months, instructions for consolidation (and resulting elimination of duplication) of Government agencies would be developed and documented by the committee. The final template for change is to be voted on by the 3 members of the leadership committee. I would expect that the steps outlined in the template would be similar to those outlined in my forthcoming bolg entitled: “Where are All the New Ideas?” The committee would use the remaining 12 months of its life to implement the changes as outlined in the previous six months. Because these consolidations will be sweeping in nature, the committee will be granted authority to revise or set aside whatever legislation exists that is contradictory, except of course, the US Constitution and its amendments. (I perceive that there will be a challenge or two there, since the Constitution provides the authority for the establishment of entities such as a Navy and a militia, so consolidation among the US Armed Forces will be tricky from a legislative perspective.) So, for example, if the committee decides that as a part of their consolidation they will dissolve the US Department of Transportation, the legislation that authorized the establishment of that organization back in the 1960s would become null and void.

With these first two problems (Congressional myopia / self-interest and lack of centralized authority) circumvented, and an independent and honest effort made at US Government consolidation, the hundreds of billions of dollars in annual savings realized through the implementation of these changes would reset the course of the American economy. It would, of course, have a near-term displacement affect on thousands of US Government employees, but considering the current US unemployment rate, it would be a drop in the proverbial bucket. The benefits would last for at least a decade or two – perhaps as many as five, until government bureaucracy once again exhibited a level of gluttony and self-absorption as to require another push on the “reset” button.

What do you think?

2 Responses to “How the US Government Can Fix Its Financial Problems”

  1. Ruth Dabrowski says:

    Hi Bill,
    I saw Newt Gingrich this morning & he is an interesting speaker and has some good ideas. He’d like to see a college economics class do a study on aid to foreign countries like Haiti. We have given for years and no solution. The charity only perpetuates the problem. Instead of the money going to the government which empowers them, how about tax credits which would create jobs in the private sector. It was like listening to the old Reagan policies. Very refreshing.
    Ruth

    • Ruth:
      Thanks for your post!

      I have often thought that Newt Gingrich has one over-arching virtue: Rather than just criticizing the ideas of others, he brings many new ideas to the table himself. Like mine, not all of his ideas are great; but I’d much rather have leadership that will contribute value to the conversation and explore new ways ahead than leadership who simply attacks the ideas and actions of others without proposing better alternatives.

      Bill

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