jstepp590
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This thread is the first of a three part series on specific ideas for solving our national debt problem. I am a grass roots activist who has come up with specific ideas to solve our fiscal problems and I need input and constructive criticism on the ideas to help me develop them. I am non-partisan, am very well educated on these issues and would not waste your time with anything that wasn't a politically and economically viable solution to these problems. This idea is a performance pay system designed to fix the incentive structure under which our elected leaders function so that we can fix the government once and be finished. I need help weighing how to score their performance to ensure that the country never has to go through a Great Depression or Great Recession again.
Political Performance Act
Sometimes it seems as though our elected leaders do not work for us anymore. Of course there is a lot of truth to that which is why the impression is so widespread. The true recipients of their care and time are their campaign contributors. Yet how do we change that back to them working for us again? We could implement more restrictive laws like campaign finance reform or term limits, but we have been trying to stamp out corruption for 3000yrs and we still have corruption in government so that doesn’t seem to be the answer. I say we go about it the other way, by providing a large monetary reward based on job performance criteria.
The purpose of this act is to change the incentive structure in which our elected leaders, and the parties, currently function. Our elected leaders deal with a budget and electoral system that dwarfs anything in the private sector. In return, they get paid an amount of money that no Fortune 100 company executive would accept. This means that we do not have the best possible candidates for the job and the ones we do have are not properly focused on what is good for our country. The current system encourages partisanship, which breeds confrontation and political gridlock, because the incentives in place do not encourage them to work together efficiently. They are beholden to their campaign contributors instead of the citizens who elected them and therefore tend to spend or waste our resources for political gain. I’m pretty sure it has always been this way, but that doesn’t mean we cannot do better to create a more efficient and streamlined government we don’t have to keep fixing (or trying to anyway).
In order to facilitate implementation of this act, I do not wish to take anything away from our elected leaders or tell them how to do their jobs. We elect them to make decisions and control the power of the purse under our form of government. What I would like to do is create an incentive structure that marries their best interests to the best interests of their constituents. By tying their performance to a structured incentive system, it is my intention to eliminate gridlock as it pertains to our fiscal stability. I also want to attract the highest quality of candidate possible to guide our nation into the future, which means their pay needs to be at least comparable to what executives earn working for private industry.
It is also my purpose to create the conditions under which our budgets are completed in a timely manner and under which they would work together cohesively to reach the common goal of fiscal management of our budget. I would like to create an environment which promotes the economic concerns of their constituents simply by doing their jobs well.
1. We take in roughly $2,500 to $3,000 billion per year in taxes. I would like to separate $10 billion to act as performance pay to be split by our elected representatives for meeting performance based goals. My proposal is to create a grading system under which our elected officials will split $10 billion amongst themselves based on job performance. If they fail to meet the criteria, they will still get their original pay but no bonus. $10 billion dollars split between our 500 elected federal officials means each one could receive up to $10 million a year just to do their jobs well.
2. One criterion could be based on federal budgets being completed and signed before the end of last fiscal year, in order to promote a stable business environment.
3. They could receive compensation for lowering debt to GDP levels by 1(?)% per year without recession until debt to GDP hits a predetermined threshold.
4. A large part of whether they get paid bonuses should be based off the unemployment rate as one determining factor. If the economy goes into a crash that is usually a good indicator of the severity. High unemployment also lowers our tax base and therefore increases our deficit/debt. A perfect example of this is the trillion dollar a year deficits caused by the 2007/8 recession.
5. They could be paid on paying down the core debt.
6. Low inflation could be one performance criteria, or else inflation/deflation levels established for them to stay within.
7. We could have a bonus for growth in the real economy, possibly pegged as growth greater than inflation or quality of living standards.
8. They should get paid a percentage based on no large jumps in deficit spending or recessions.
9. Just as in the military, they stand or fall together. Whether they know it or not they are one team with two halves supposed to be doing their jobs. They either all make their bonus or none do.
10. If they want to start a war, fine, but our deficits will go up and they will lose money. They could raise taxes to pay for the war instead of adding it to the debt but then our economy will take a hit and place their other performance criteria at risk of being missed. Therefore if they start a war they better be VERY sure they need to because they will get hit in their wallet. If they deregulate an industry that causes an economic crash in return for campaign contributions or sign trade agreements that are not in the citizen’s best interest then it should reflect in their pay as painfully as it reflects in ours.
11. They could receive a bonus for achieving zero growth in our debt compared to growth in the economy.
12. A team will need to be formed, made up of economists and policy makers to determine the best practices under which to base the grading system on. A system of 100 points will be created under which they will weigh different government practice and goals with results.
13. There should be a bottom score that is the demarcation between commission and nothing in order to promote a holistic approach instead of focusing on narrow and easily hit criteria.
14. If adopted here this system is likely to get other countries to follow suit. It could also apply to the state level as well.
Conclusion: While I believe this is a great place to start, we will definitely need to have this concept reviewed by specialists in economics and government policy to determine what the goals are and how to weigh them. I am deliberately leaving this part open until we have the necessary expertise to avoid the law of unintended consequences. However by placing our elected leaders on this type of performance pay system we are going to attract higher quality candidates, curtail corruption and waste, end needless military adventures, and promote stability in the economy all by using a method that is self-perpetuating and reinforcing. This is the same type of performance pay system in use in private industry to attract high quality executives and is easily understood.
The main parties stand to gain as well so there should be little resistance from them. As an example, if a party has 100 elected representatives who are meeting their goals and the party charges the official $2 million out of their $10 million the party will be sitting on $200 million in their coffers. This will promote a desire in both of the parties to develop best practices to achieve said remuneration and will create an incentive for them to work together on fiscal issues. We won’t have to worry about backroom deals as much under a system like this.
If they do not hit their goals and the nation suffers they will not get paid either so the elected representatives pay will drop from potentially $10 million a year to their current $150k, so the incentive for our elected leaders will be huge. If they do not meet their goals they are punished as a group instead of individually or as a party. If they fail to meet their goals then at least we will save $10 billion that year by not having to pay them.
Once we fix government this time it will stay fixed, and they will be very happy to implement it. Everyone wins, nobody loses and does not add to government debt or deficit. As long as they are meeting their yearly goals the whole country will be the winners.
Political Performance Act
Sometimes it seems as though our elected leaders do not work for us anymore. Of course there is a lot of truth to that which is why the impression is so widespread. The true recipients of their care and time are their campaign contributors. Yet how do we change that back to them working for us again? We could implement more restrictive laws like campaign finance reform or term limits, but we have been trying to stamp out corruption for 3000yrs and we still have corruption in government so that doesn’t seem to be the answer. I say we go about it the other way, by providing a large monetary reward based on job performance criteria.
The purpose of this act is to change the incentive structure in which our elected leaders, and the parties, currently function. Our elected leaders deal with a budget and electoral system that dwarfs anything in the private sector. In return, they get paid an amount of money that no Fortune 100 company executive would accept. This means that we do not have the best possible candidates for the job and the ones we do have are not properly focused on what is good for our country. The current system encourages partisanship, which breeds confrontation and political gridlock, because the incentives in place do not encourage them to work together efficiently. They are beholden to their campaign contributors instead of the citizens who elected them and therefore tend to spend or waste our resources for political gain. I’m pretty sure it has always been this way, but that doesn’t mean we cannot do better to create a more efficient and streamlined government we don’t have to keep fixing (or trying to anyway).
In order to facilitate implementation of this act, I do not wish to take anything away from our elected leaders or tell them how to do their jobs. We elect them to make decisions and control the power of the purse under our form of government. What I would like to do is create an incentive structure that marries their best interests to the best interests of their constituents. By tying their performance to a structured incentive system, it is my intention to eliminate gridlock as it pertains to our fiscal stability. I also want to attract the highest quality of candidate possible to guide our nation into the future, which means their pay needs to be at least comparable to what executives earn working for private industry.
It is also my purpose to create the conditions under which our budgets are completed in a timely manner and under which they would work together cohesively to reach the common goal of fiscal management of our budget. I would like to create an environment which promotes the economic concerns of their constituents simply by doing their jobs well.
1. We take in roughly $2,500 to $3,000 billion per year in taxes. I would like to separate $10 billion to act as performance pay to be split by our elected representatives for meeting performance based goals. My proposal is to create a grading system under which our elected officials will split $10 billion amongst themselves based on job performance. If they fail to meet the criteria, they will still get their original pay but no bonus. $10 billion dollars split between our 500 elected federal officials means each one could receive up to $10 million a year just to do their jobs well.
2. One criterion could be based on federal budgets being completed and signed before the end of last fiscal year, in order to promote a stable business environment.
3. They could receive compensation for lowering debt to GDP levels by 1(?)% per year without recession until debt to GDP hits a predetermined threshold.
4. A large part of whether they get paid bonuses should be based off the unemployment rate as one determining factor. If the economy goes into a crash that is usually a good indicator of the severity. High unemployment also lowers our tax base and therefore increases our deficit/debt. A perfect example of this is the trillion dollar a year deficits caused by the 2007/8 recession.
5. They could be paid on paying down the core debt.
6. Low inflation could be one performance criteria, or else inflation/deflation levels established for them to stay within.
7. We could have a bonus for growth in the real economy, possibly pegged as growth greater than inflation or quality of living standards.
8. They should get paid a percentage based on no large jumps in deficit spending or recessions.
9. Just as in the military, they stand or fall together. Whether they know it or not they are one team with two halves supposed to be doing their jobs. They either all make their bonus or none do.
10. If they want to start a war, fine, but our deficits will go up and they will lose money. They could raise taxes to pay for the war instead of adding it to the debt but then our economy will take a hit and place their other performance criteria at risk of being missed. Therefore if they start a war they better be VERY sure they need to because they will get hit in their wallet. If they deregulate an industry that causes an economic crash in return for campaign contributions or sign trade agreements that are not in the citizen’s best interest then it should reflect in their pay as painfully as it reflects in ours.
11. They could receive a bonus for achieving zero growth in our debt compared to growth in the economy.
12. A team will need to be formed, made up of economists and policy makers to determine the best practices under which to base the grading system on. A system of 100 points will be created under which they will weigh different government practice and goals with results.
13. There should be a bottom score that is the demarcation between commission and nothing in order to promote a holistic approach instead of focusing on narrow and easily hit criteria.
14. If adopted here this system is likely to get other countries to follow suit. It could also apply to the state level as well.
Conclusion: While I believe this is a great place to start, we will definitely need to have this concept reviewed by specialists in economics and government policy to determine what the goals are and how to weigh them. I am deliberately leaving this part open until we have the necessary expertise to avoid the law of unintended consequences. However by placing our elected leaders on this type of performance pay system we are going to attract higher quality candidates, curtail corruption and waste, end needless military adventures, and promote stability in the economy all by using a method that is self-perpetuating and reinforcing. This is the same type of performance pay system in use in private industry to attract high quality executives and is easily understood.
The main parties stand to gain as well so there should be little resistance from them. As an example, if a party has 100 elected representatives who are meeting their goals and the party charges the official $2 million out of their $10 million the party will be sitting on $200 million in their coffers. This will promote a desire in both of the parties to develop best practices to achieve said remuneration and will create an incentive for them to work together on fiscal issues. We won’t have to worry about backroom deals as much under a system like this.
If they do not hit their goals and the nation suffers they will not get paid either so the elected representatives pay will drop from potentially $10 million a year to their current $150k, so the incentive for our elected leaders will be huge. If they do not meet their goals they are punished as a group instead of individually or as a party. If they fail to meet their goals then at least we will save $10 billion that year by not having to pay them.
Once we fix government this time it will stay fixed, and they will be very happy to implement it. Everyone wins, nobody loses and does not add to government debt or deficit. As long as they are meeting their yearly goals the whole country will be the winners.