Government Spending

My strongest ability is my knack for finding patterns and using those patterns to solve problems. I’m the guy you want in the back of your moving truck deciding what box goes where.

I have two “big picture” ideas on how to improve government spending.

Decentralization

Right now, almost all federal government agencies are headquartered in Washington, DC. There are several very good reasons for this:

  1. Congress is close to the agencies they fund.
  2. Businesses working with multiple agencies can easily provide goods and services.
  3. Government workers can easily move from one agency to another as staffing needs change.

The problem is that these have led to serious negatives as well.

  1. Having everything located in one place makes that place vulnerable to attack.
  2. It is easy and inexpensive for lobbyists to visit multiple agencies and members of Congress.
  3. Living expenses in Washington are now the fourth-highest in the U.S.
  4. Washington has the third-highest cost for commercial real estate.
  5. Washington has the third-longest commute time of major U.S. cities.

What I propose is a gradual decentralization of federal government agencies. Every two years, we would have a bidding process, where cities around the U.S. could bid to be the new headquarters for a government agency. For example, if we started with Oak Ridge, Tennessee, bidding to be the new headquarters for the Department of Energy, they could promote the fact that, according to Bankrate.com, their cost of living is 41% less than Washington, and that their new headquarters is near one of their main facilities.

By doing the decentralization slowly, we would minimize the job impact on the Washington metropolitan area while also reducing the operating costs for the agencies that remained. Eventually, Washington would be in a position to competitively bid to keep some agencies, and cheaper real estate would make Washington a desirable market for private enterprise.

In addition, I would also like to encourage the federal government to use more telecommuting, including Congress. There’s no reason members of Congress shouldn’t be able to do 95% of their jobs from their home districts. Voting, committee meetings, and even debates should be easily manageable online. I know, for example, that the mortgage on my two-bedroom house in Chattanooga is about one-third less than the rent on a two-bedroom apartment in the less fashionable areas in Washington. I would much rather see members of Congress spend a few days in a hotel and a few plane flights each year than flights home every other weekend and having to maintain two homes. We should be able to cut Congressional pay and staff sizes significantly, since they would only have to maintain one office in their district instead of one in the district and one in Washington.

After the costs of relocation, we should save about 30% per year on the operating costs for the federal government while also improving government services by moving headquarters facilities closer to the people and businesses they serve. We should also make a positive impact on the environment by reducing commutes, flights, and households.

Budgeting Like a Business

I always see government budget numbers looking at the cost side of the equation. For example, NASA’s budget is $19.3 billion dollars this year. What I don’t see without doing some significant digging is what the benefit side of the equation is. With a little digging, I can find out that NASA generates ten dollars of economic activity for every dollar spent. So, what I don’t understand is this:

  • We spend $19.3 billion dollars on NASA.
  • That generates $193 billion dollars in economic activity.
  • If that $193 billion is taxed at the average federal tax rate of 17.6%, this generates tax revenue of $34 billion.
  • So, $19.3 billion in spending results in a profit to the government of $14.7 billion.
  • Why aren’t we spending more money on NASA?
The International Space Station over Algeria (NASA photo)

The International Space Station over Algeria (NASA photo)

I know the National Park Service has similar numbers, and I am certain that, with some research, we could find out which government programs operate at a net profit, or, at least, at breaking even. With this knowledge, we could target some discretionary spending in an effort to increase government revenues, allowing us to spend on programs that we want but don’t pay for themselves or to reduce taxes. What research I have done suggests that, in general, research and infrastructure funding results in medium-term profits for the government, but I would like to confirm that.

Please note that I am not an economist, and I only had one economics class in college. There could be something wrong with my understanding of things. Obviously, there may be diminishing returns with some government investment–if we doubled NASA’s budget, the return might only increase by half. I would want to discuss these ideas with economists and running test programs before implementing these ideas across the whole federal government.


As always, if you have any ideas that you think would improve the way the government works, send them my way. I will be happy to steal them.

Thanks for reading, and have a good weekend! If you’re local, I hope to be at the Chattanooga FC women’s game tonight and the men’s game tomorrow night, sitting in or near the front of section 207.

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2 Comments

Filed under Federal Budget

2 responses to “Government Spending

  1. Jay Kersting

    N.A.S.A. provides great Return on Investment, but it provided something else at one time and it could do that again. It could inspire another generation to seek careers in Science, Technology, Engineering, and Mathematics. As we all know, those with STEM backgrounds tend to contribute more to the tax base as well through their higher incomes. Another reason to reverse the trends started in the later years of the Johnson administration and continued in the Nixon through Obama administrations.

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