Budget Transparency

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At least he was honest with our money now.

Explaining Government Spending

Our federal, state, and local governments spent $10.12 trillion in 2021, 44% of the GDP. That figure is larger than any other nation’s total economy except that in China; it is more than twice the world’s third largest economy, in Japan. We know the largest contributors are health care (21%), social security and pensions (15%), education (13%), defense spending (10%), debt service (6%), and infrastructure (5%), leaving 30% for all the rest. The first two are entitlements, established by law, all but immune to reduction unless we turn a health care corner and demand less. Education (which is 90% state and local), defense, debt service, and infrastructure are also not candidates for reduction; indeed, infrastructure needs much more just to rebuild all that has been decaying for so many years, and one could make a case for much better teacher salaries.

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But beyond these large categories, do we know where the money goes? No. Most if not all governments in America publish budgets each year, with comparisons to previous budgets, and a narrative about needs and ends. But they are seldom read. At a recent election in San Francisco the budget office said only one person requested a written copy of the budget, it taking up more than 400 pages, most of which budget was not accessible on the Internet.

We are not intending here to produce a program of budget reduction. It is likely that some items could be reduced, and some items need more. We know at the federal level that Republican zeal for budget reduction disappears rapidly when they have control of the Presidency and the Congress. Our last Republican President raised entitlements by 18% (by law), defense spending by 20% (by design), and discretionary spending by 30% (by various forms of will and necessity) after promising a balanced budget in four years and debt elimination in ten after reducing taxes, his only signature piece of legislation during his four years in office. These of course were insane promises, but the general point remains—no Republican President after Hoover reduced federal spending.

This condition has not lessened the American sense of a bloated, inefficient, spend happy government at all levels that needs to be reined in to reduce the burdens on many Americans. (“Many Americans” means less than 60%; 40% of all households in American pay no federal or state taxes for want of sufficient income to rise to the lower threshold of payment, their contributions coming in various forms of sales and value added taxes; these families tend to be larger than average.)

Full participation in American democracy should include participation in budget decisions beyond blanket approval after administrative development and legislative approval within any one level or instance of government. That will only be possible when budgets are fully automated and accessible through easily-used forms of analysis and comparison over the Internet. Such a system was partially developed for Palo Alto, California some years ago, but has been abandoned. It should be revived.

We propose here a starter kit that can be crowd sourced or open sourced. The first step would be a small group including software developers and town administrators that would develop a working specification after setting out a suitable mission (the start of which we supply below). That would be circulated among a wider range of cities and towns, both in number and size, and approach a few state governments that are willing to talk about it. The next step would be software development and convincing a few towns and cities to be early adopters. We think just one town would be a mistake. Early adopters in general do not represent the wishes and needs of all members of a future market. When the kinks are out of early software versions, changes will be necessary as a wider range of users enters the picture. The level of changes will be reduced by having a family of early adopters rather than rely upon just one.

Mission

Create and market a system by which any level of government in America would make available to its citizens an Internet version of budgets extending back five years, the current proposed budget, working budgets for next year, with enough granularity to see individual items, with tools of analysis easily accessed by users, including comparison to comparable budgets in other towns or cities. Within this system should be budget translators to a common chart of accounts (no two towns capture costs in the same way) for comparison across communities. Over time the system should include references to statutes and administrative justifications for costs.

If you think this is a good idea and have some thoughts about how to move it forward, write us at FederalistPapersProject@gmail.com. We will develop the ideas here organically with your help.