Quick Fixes for Existing Governments

Governments have gone bankrupt running unsustainable policies. Although I believe that converting to the mini-government (migov) system will solve the problems completely, we can still modify existing systems to avoid the biggest problems.

1) A government in debt could offer a deal to its citizens that will simplify taxation. Cutting out paperwork will reduce the need to hire accountants as well as civil servants. It is a win-win situation.

  • The removal of all taxes except income, real estate and consumption/sales tax
  • Taxes will only be collected if the revenue exceeds internal cost by at least 50%
  • The removal of all tax benefits and deductibles
  • The removal of all financial subsidies, special refunds and social welfare schemes

2) Government functions that are not critical to national operations can be cut or simplified to shave at least 50% off their original budget allocations. Some examples include:

  • Military expenditure for a first world country in peacetime
  • National┬áprestige projects such as constructing special buildings or hosting expensive international events (e.g. Olympics)
  • Politically motivated foreign aid
  • Unnecessary regulations (e.g. imports, immigration, employment)
  • Excessively complex legal systems

3) If the civil service is suffering from high rates of corruption, this must be addressed immediately:

  • 80% of the civil servants can be retrenched, and the pay of the remaining ones tripled. Cut should be focused on middle management who tend to be drawing the highest pay for the least productivity. Cuts should start from the lowest performing civil servants.
  • The pay of the lowest ranking officer should be enough to feed his or her family. If it is too low, it must be raised.
  • Low ranking civil servants can apply to work over-time, or exchange their vacation leave for cash, if they still need more money. They will, however, not be allowed to work for other employers.
  • All policies, regulations and work processed has to be reviewed and simplified. The work load should be reduced to at most 20% of its original levels after the restructuring.
  • The use of and emphasis on a zero-tolerance policy to corruption
  • A secret corruption police can be formed with independent non-governmental agencies to test civil servants for corruptibility. Civil servants found to be corrupt will be fired and those who are found to be upright can be considered for salary increments or promotion.

3) Once measures are in place to return the government budget to surplus, the government can sell its national assets and pay off high interest bearing debt immediately:

  • Gold holdings
  • Foreign reserves
  • Works of arts
  • Non-strategic territory such as far flung islands (but this can be very politically sensitive)

4) Any surplus from all the budget cuts and sales can be channeled to a stimulus fund. This fund will create jobs by improving the country’s infrastructure. Special efforts are to be made to help the needy, handicapped and retirees to secure jobs to pay for their livelihoods.

5) The government must conduct its activities in an open and transparent manner. It should account for its revenue and expenses. It should also have at least two external parties audit its accounts.

6) The government must never allow a budget which runs a deficit to be passed, unless it has savings to cover its expected deficit.

7) The government must ban fractional reserve banking as well as any policy that will promote economic inflation. Instead of printing money to get out of financial recessions, it should save money during good times so that it can invest them during bad times in infrastructure, education and other long-term projects which can increase the country’s and citizens’ wealth.

8) The government must ensure that companies (including its own special agencies) do not exceed a threshold in size that can adversely affect the country’s financial operations.