From: dcaulkins@igc.apc.org (Dave Caulkins)
Newsgroups: sci.econ
Subject: Economic Democracy
Date: 7 Oct 92 23:40:00 GMT
Nf-ID: #N:cdp:1466000001:000:4363
Nf-From: cdp.UUCP!dcaulkins    Oct  7 16:40:00 1992


Economic Democracy *

"He who pays the piper calls the tune." - proverb

  D. Caulkins                                       10/7/92

The concept is simple and compelling - US taxpayers should be
given the right to 'vote' on how their tax dollars are spent.

Economic democracy might work like this.  With the forms mailed
to each tax payer would be included a list of major US Government
budget line items and the amounts spent on them in the previous
year.  The tax payer would indicate on his or her yearly tax
return the percentage of tax dollars to be spent on each budget
line item.  The IRS computers would calculate cumulative
percentages across all tax returns to produce percentages of
total tax revenues that could be spent on each budget item. 
Congress and the President would be required to follow these
tax-payer-selected spending percentages. 

To prevent overly large financial shock to existing government
programs, it would probably be wise to put a limit to the yearly
amount by which any budget item could change.  Plus or minus 5 to
10 % per year seem like a good limits.

As indicated in Table 1 below items 1, 3, 5, and 8 cannot be
arbitrarily reduced and may require additional limitations.

It might be a good idea to restrict economic democracy to items 1
- 12 in Table 1 during the first few years of the program.  Items
13 - 21 add up to only 5 % of of the total budget; the amounts
allocated to each could be left alone until economic democracy
has proven its effectiveness.  

                          Table 1
               Major Items in the 1990 Budget

  From "US Statistical Abstracts"; primary source is the "Budget
  of the United States Government," produced by the Office of
  Management and Budget.                           

+-+-----------------------------+----------+-------+--------+---+
|i|                             |          |       |        |   |
|t|                             |          |       | cumul  |   |
|e|    Budget Item              |     $    |       | -ative |   |
|m|                             |(billions)|   %   |  %     |  
| 
+-+-----------------------------+----------+-------+--------+---+
 1 Income Security **              491.70     37.95    37.95   
 2 Defense                         296.30     22.87    60.82  60
 3 Interest on debt **             175.60     13.55    74.37   
 4 Health                           57.80      4.46    78.84  80
 5 Fed Retirement+Disability Ins ** 52.20      4.03    82.87
 6 Education, training, employment  37.70      2.91    85.77   
 7 Transportation                   29.30      2.26    88.04   
 8 Veterans Benefits **             28.90      2.23    90.27  90
 9 Commerce and housing credit      22.70      1.75    92.02   
10 Natural resources + environment  17.50      1.35    93.37   
11 International                    14.60      1.13    94.50
12 Agriculture                      14.60      1.13    95.62  95
  
===============================================================
13 Science, Space, + Technology     14.10      1.09    96.71   
14 General Government               10.60      0.82    97.53   
15 Admininstration of justice       10.50      0.81    98.34  98
16 Community, regional development   8.80      0.68    99.02  99
17 Retirement+Disability Ins         5.20      0.40    99.42   
18 Energy                            3.20      0.25    99.67   
19 General purpose assistance        2.20      0.17    99.84   
20 Consumer health + Safety          1.50      0.12    99.95   
21 Health education + training       0.60      0.05   100.00  
     Total                       1,295.60    100.00

** - "entitlement" or other items that cannot be arbitrarily
reduced.

An Improvement

This discussion has been based on published US Government budget
line items; it would probably be a good idea to re-categorize the
budget into fewer but more distinct and easily understood
sections.  A possible list might be:

Agriculture Subsidies
Consumer Protection
Debt interest
Defense
Education
Energy
Federal and Veteran's Benefits
Foreign Aid
Government Operating Expenses
Health
Housing
Income Security and Retirement
Natural Resources + Environment
Science

* - Economic democracy is probably not a new idea; Most recently
it was proposed to me by Elisabeth Caulkins; I first heard of it
from Barbara Avedon of Another Mother for Peace.