Three Ways to Reduce The Cost of Government
Article By: Ryan Wiseman
Using these three ways, we can reduce the size of our federal government. And, we can do it in a way that benefits the taxpayer, the bureaucrat, and our political leaders. These 3 ways can be a benefit to all of us!
I first need to ask a question that some people don’t know the answer to: Why do we need to reduce the cost of federal government?
The problem is not that we have a government. A great government is one that allows its citizens to live a happy, healthy, and decent, high-quality life, and not be a burden to others. It is also one that helps people in need get back on their feet, and gives them their dignity back. With this in mind, it is important for the public sector of the economy (the government) to not become too big of a burden or weight on the private sector of the economy for the chief reason that the private sector is the one paying for the public sector, and so you want the private sector to thrive and be strong and healthy – an unhealthy private sector due to ever-increasing taxation by the public sector is like a man walking along with someone on his back, with that person on his back continuing to increase in weight until the person carrying him cannot carry the weight any longer and eventually collapses under the weight. We don’t want that to happen to the country we love.
We currently borrow almost a trillion dollars each year to pay for the cost of government, but keep in mind that eventually, if we get too deep into the hole, those who lend us the money, including investors who buy savings bonds, and nations like China that lend us money, will no longer see us as a reliable place to invest their money. At that point in time we will start to implode. Also keep in mind that the amount of money that we spend just to pay for the interest on our national debt right now is already enough to pay for our welfare and government aid programs many times over – that money could be better spent creating other programs that help people, paying down our national debts, as well as lowering taxes for millions of people who work hard for their money. Every year, the cost of our federal government grows more and more out of control.
The first and primary thing that we need to do is to put a freeze on the size of government and number of government personnel – the cost of government cannot go up, and the number of people working for the government cannot go up either. After having this policy in place, we can work on ways to reduce the size of government and its cost.
So, who better would know where government is wasting money than the very people who work within the government?
Solution no. 1: Let government Workers give suggestions, then reward them:
With this in mind, why not allow the government workers give recommendations on ways to reduce government waste? In order to help motivate these workers to give recommendations, we can reward them with a percentage of the money saved over the next year. For example, if a worker gives a suggestion that can save the government over $50,000 over the course of the next year, then the worker should be rewarded with perhaps 10% of the money saved. Why, a reward of $5,000 would be more than enough motivation to get government workers to suggest different ways to save money.
Imagine having over 1,000 different suggestions coming in, each of which saves at least $50,000 per year. That could be over $50 million saved by the federal government. Keep in mind, though, that some suggestions would be worth much more than this amount – perhaps someone has a suggestion that saved the government over $1 million per year. Even a mere 50 of these types of recommendations would account for another $50 million saved.
Solution no.2 – Reducing the number of government department personnel:
Another thing to keep in mind is that some suggestions would involve recommending ways to do a department task using less personnel, meaning that it would render the need to reduce workers in that department by a certain number. When this happens, you can’t just lay people off like a private company might be able to do, because most government workers are part of a union and this isn’t allowed. So, how do you reduce the number of workers to implement someone’s suggestion?
You do it the same way that a large unionized business would when they need to cut back their workforce. You make an announcement and tell the department that the first people that leave the department and get hired on at a business or corporation in the private sector of the economy will receive a 6-month severance pay, along with their benefits for the next year. By doing this, you motivate some bureaucrats to leave their cushy government job, and if they line another job up right away and leave, they can continue to get a regular income, now from another job, while getting a great bonus on top of that, which would really make their lives better. It may cost the government the cost of that person’s salary for half the year, but the government then saves the amount of that person’s salary for the other half of the year, and saves the total cost of that person’s salary for every year after that.
Now, with this in place, the person giving the suggestion will also receive 10% of the money saved over the course of a year. For example, a government worker gets paid $50,000 per year, but they choose to leave and go to the private realm, and take a severance package worth $25,000. Since the department needs to get rid of 10 people, and each person who leaves saves the government $50,000 per year, the person suggesting the change will receive $5,000 x 10 people, for a total of $50,000. That is a handsome sum for the person or people suggesting the change, allows the people leaving the government to receive a sizable sum, and allows the government to save a huge chunk of change as well – this is good for every party involved! Another 5% should be given to another party which will be talked about below.
Solution no. 3 – Our Congressmen and Senators – give them performance pay:
We pay our congressmen and senators a certain amount of money per year, and we complain that they actually make too much money for the job they do, especially when they keep raising their own pay. We complain that these people get paid a sizeable amount of money per year, as income, to create new laws and policies that are supposed to benefit the American people. They continue to stream out new laws that create more and more government agencies that cost the taxpayer ever more money. We complain and complain and nothing ever gets done. So, how can we change things for the better?
Let’s allow our representatives and senators in Washington to get paid not only a base salary, but also extra income based on performance pay. This would be similar to a salesperson that gets paid a base salary and commissions on top of that based on how successful they are at bringing sales. It would also be similar to a CEO who gets paid their regular income, and gets performance pay on top of that based on how profitable his business or corporation is the previous fiscal year. Although many of you may not like this idea, and think that CEO’s get paid way too much, this setup would actually be beneficial to the American people if applied to those who make our laws for us in Washington. So, how would this performance pay work?
For every 20 dollars saved by the federal government, when comparing its spending to the previous fiscal year’s government spending, our representatives would get one dollar. In other words, our representatives would get paid 5% of all money saved compared to the previous year’s spending. For example, the federal government (United States) spent $3.45 trillion for fiscal year 2013. The House of Representatives and House of Senate agree on a budget that lowers federal spending to $3.1 trillion, which means savings of $350 billion. The bonus would be split into 635 equal portions, with each representative getting one portion of that bonus, and each senator getting a double portion of that bonus because of their more prominent roles. In this example, this would mean that the 5% of the money saved, or $17.5 billion, would be split 635 ways, or a $27.55 million bonus for each representative, and a $55.1 million bonus for each senator. In this case, the bonus given to our political leaders should work to our benefit. They can get paid much more than all other representatives throughout the world, and have the money not be based on corruption, but on actually doing something that is beneficial to their constituency.
On top of this, we can give our representatives and senators performance bonuses for many other factors that benefit us as well. For example, if we require our government to subsidize 25% of the cost of health care, it would not only reduce the cost of health care and insurance premiums for all of us right off the bat, but every time ways were found to reduce the cost of health care for all of us, it would reduce the amount of money government would need to spend on their 25% subsidy, thus allowing our congressmen to take home a bonus on how much they reduced health care spending. Besides this, we could give them bonuses based on unemployment levels, levels of poverty, levels of personal and consumer debt, reducing the size of our national debt, as well as a host of other things. (Check out the other article I wrote explaining performance pay for congressmen in more detail.)
With these three things in place, a suggestion and reward system in place for government workers, a severance package program for government workers who leave to go into the private sector, and a performance pay system for congressmen, we can really shake things up in a way that is beneficial to all of us, including the American people in general, government workers, and our political leaders.
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