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Maybe I am misreading your argument, but it seems like you are saying the cause of the US deficit problem is that the faction that trades entitlements for votes has gained control of the system. If that were true, and this faction were really just concerned with entitlements, there would be an obvious solution to the deficit: raise taxes. This may be every bit as horrible as you imagine, but it wouldn't involve a debt crisis.

The problem as I see it, is that the faction that trades entitlements for votes and the faction that trades tax breaks for votes are both simultaneously in control. The low taxes people win all the fights about taxes, and the high spending people win all the fights about spending.

The bug in democracy that led to our deficit problem is the lack of anything to prevent us from voting to have our cake and eat it too.

Tax breaks are just another form of entitlement. Tax breaks are almost worse than other government benefits. It's basically taking out interest only loans on the tax payer's behalf. Here's $500 ... Oh and by the way, that comes with $500 worth of debt with a 4% interest rate that you are going to pay forever.

"The American republic will endure until politicians realize they can bribe the people with their own money" Alexis de Tocqueville

That's a nice quote, but it's misattributed.

http://en.wikiquote.org/wiki/Alexis_de_Tocqueville#Misattrib...

There is, indeed, a most dangerous passage in the history of a democratic people. When the taste for physical gratifications among them has grown more rapidly than their education and their experience of free institutions, the time will come when men are carried away and lose all self-restraint at the sight of the new possessions they are about to obtain. In their intense and exclusive anxiety to make a fortune they lose sight of the close connection that exists between the private fortune of each and the prosperity of all.

Here's a more extensive (and accurate) one.

Eventually the elected body will split into a faction that represents business interests and a faction that trades entitlements for votes.

What makes you think that a faction that represents business interests does not also trade entitlements for votes? The real problem is that ALL factions in a democracy demonstrate the universal human tendency to take benefits today and put off obligations for the future.

Business wants all upside (even when it conflicts). As discussed yesterday: http://www.nytimes.com/2011/07/06/business/economy/06leonhar...

The problem is that nobody has a long term sustainable point of view. Why worry about the eventual cluster#$%@ when you can stuff your pockets today?

But that's the 'free market' right? Things will work out perfect in the end because of people's self-interest. The free market tells us that it's impossible for bad things to happen.

Taxes, regulation, Government spending, etc are interventions in the free market.

Don't underestimate their ability to redefine GDP or 'budget deficit'. Also, if push comes to shove, there is always the option of cranking up the printing presses (Congress can wrestle control of monetary policy if the Fed is too uncooperative).

We just learned this lesson in California where voters recently passed an "on-time budget" initiative. The way it worked was Legislators didn't get paid after the budget deadline. In theory this would get them to pass a budget on time instead of drawing it out to the point of state insolvency like they did every previous year.

Did it work?

Of course not. They passed an absolutely fictional budget. It not only depends on California getting three times its previously anticipated tax revenue but it also depends on tax hikes that haven't been passed (passing a budget requires a majority while passing a tax increase requires a 2/3rds vote where at least a few Republicans have to sign on)

Bottom line: Government can always redefine terms

One of the broadly-speaking Anglo-Saxon innovations was the idea of a government of laws, and not men. I think it's one of those "good lies"; it isn't ever true, in reality "we're all just folk" and it's always government of men, but it's very good for all members of a society globally to maintain the fiction. Unfortunately, it does require a significant fraction of the society to choose to maintain the fiction (with varying levels of awareness of the fact that it is actually fiction), and locally it advantageous for people of power to implement government of men, not laws.

And in our sophistication pretty much all the intellectuals we've got busily tearing apart all the foundation that "government of laws, not men" is built on. So back to government-of-men we go. Hooray.

I wonder how many legislators realized they were thinking of the taxpayers as the enemy when they did that.

I'd like to see legislators _pension_ provisions tied to future economic metrics.

Hopefully that would inspire them to take a longer term view, and they would be less able to redefine terms when they are being applied as they are no longer in power. Probably hopelessly naive thinking though ...

But they didn't get paid. That's the point. The fictional budget was passed (but not signed by the governor), and the controller said it was ridiculous, and therefor he would not be authorizing payment in accordance with the on-time budget initiative.

Redefining GDP and deficit are likely, they are already looking at redefining CPI see-

http://www.zerohedge.com/article/aarp-screams-blood-murder-w...

Orwell was an optimist.

That is a brilliant summary. Not enough people make the connection to Rome in my opinion. I know it's hip to compare the US to Rome but it is actually borne out in the history. At least in my opinion.

Great idea by Mr. Buffet. Similar to Brazil's balanced budget laws, btw.

Next up: funny ways of counting GDP ;-)

> Next up: funny ways of counting GDP ;-)

"Once a social or economic measure is turned into a target for policy, it will lose any information content that had qualified it to play such a role in the first place."

http://lesswrong.com/lw/1ws/the_importance_of_goodharts_law/

Sigh...

The key issue at hand is the culture. A cultural change must be effected such that everyone understands that the 'government cheese' (bread, circuses) brings the system down. Individual effort must be rewarded, and lack of effort must not be upheld. History records this over and over, providing a clear description of the effects of government cheese. Britain lost their dominance in part due to it.

It was not until the communism of China was mitigated that their economy began to take off.

I understand that the same thing happened with India and their socialist policies, but I am not as versed in India's history.

There are heavy negative effects that come into play when large-scale growth happens. The Industrial Revolution is the history of the West's large-scale growth. It's taking place in China now too.

Let us not delude ourselves that sunshine, rainbows, unicorns and world peace will suddenly come about. Futurama provides a humorous glimpse into that sort of future.

People are always self-interested and selfish, in the governmental scale. While we might not like that... we always prefer better things to happen to us and our little domains.

I actually agree with you somewhat although you are not saying a lot. We have to find a system where the fortune of a single person automatically contributes to the good of the whole. Capitalism is actually already surprisingly good in that regard, and that's why it has been so successful. But in the end, there will be people who are vastly more successful in any system, and we need a way to make all efforts automatically contribute to society. I don't mean taxes, because those can be controlled by a governing body and are regarded as external force. Nobody wants to pay taxes. No, we need motivators which are intrinsic to the human mind. People need to want to help. Let's not kid ourselves and think that we can just "pull ourselves together" and be nicer to each other in the future. Human nature can't be overridden by mere wishes. Capitalism works because there is nothing stronger than the motivation to provide for yourself and your family.

How do we use that motivation to nurture society as a whole? I don't know. Taxes are not good enough, as we can see today, they can always be outsmarted. You can't outsmart human nature, which means billions of people struggling towards a single goal.

Successful economic models cannot be divorced from the cultural context in which they arise. American-style Capitalism was born during the Protestant Reformation. This religious movement provided a theological basis for individual property rights and free enterprise, as well as the understanding that actors in such a system must be restrained by conscience and charity toward their fellows.

We cannot expect to solve the problems of human nature via economics or public policy when the philosophical and religious landscape has shifted.

I argued that we can't fight human nature and therefore we should find policies that utilize it for the good of everyone. You argue that we as human beings have to change first before we can accept any such policy. Of course it will be a little bit of both, but seeing as me or anyone hasn't even defined any such new policy, I find it hard to see how you can oppose it yet with religious or philosophical concerns. It may very well be possible today. In fact, it's highly likely because the strategy behind the policy is based on human nature.

> Nobody wants to pay taxes.

See, this just isn't true. The fact that this idea is taken for granted gets at the root of the problem.

I'm happy to pay my taxes, although I don't pay more than I legally need to.

> I don't pay more than I legally need to.

Well that's what I meant. You have no particular wish to pay taxes. You wouldn't mind stop paying them. You would mind stop having sex though. I'm talking about motivations that can't be shut off and don't need to be taught to every new kid, because you are born with them. We need to somehow harvest them to make working together attractive.

I would argue that all successful policies somehow come down to the fact that people want them in place. In that regard, taxes are clearly a failed experiment. You cannot force people to do anything (not for long, not forever as we can see from history). The only really effective law, is the one that people love to obey.

The pre-requisite for that to happen is an electoral system that advantages larger parties, such as fptp. I've seen enough politics in different electoral systems that I honestly believe that most of the problems prevalent in America today would really be solved with a better way to elect congressmen.

Maybe increase the number? That would make bribing effort a little harder since it would require spreading the money to more people. Wasn't the house of representative supposed to be sized in proportion with the population of the US?

That's how it works now. The size of Congress is a function of the population, while the Senate is a fixed 2 per state. You're correct though that a larger legislature (in terms of number of representatives) would make bribes (including political favors often used to pass unpopular legislation) more difficult, because the marginal return on each bribe is diminished.

No, the size of the House is fixed at 435 (see http://en.wikipedia.org/wiki/Reapportionment_Act_of_1929).

The apportionment of the seats to the various states is based on population, but the overall size is not.

You are correct. I should have said "the proportion of Congressional representation is a function of local population densities." I knew that the representative to population ratio had been shrinking, but I didn't know they had since set a fixed limit.

How about we increase the size of congress to 1 member per voter? What kind of problems would have then?

I can't tell if you're joking or seriously advocating a pure democracy. A pure democracy is nice in theory, but it's effectively mob/majority rule. It is also a considerable burden to write, read, and vote on every piece of legislation. A representative democracy mitigates those issues by appointing a single person to represent the wishes of his or her constituents. This also slows down the progress of democracy by forcing voters to wait until they can elect a new representative. But is that a bad thing? The waiting is effectively what prevents the mob rule syndrome.

Then again, it would be difficult to bribe >50% of the population to pass a bill.

Wasn't really joking or advocating it. Just a thought experiment on the thread we were on. I suppose the answer would have to wait a few hundred years after we initiated the experiment to see where it goes off the rails.

Another variable, you mention, is term of office. If voters only "remember 6 months back" then would having elections every 6 months instead of 2 years help?

I wonder if future forms of government will even require congressmen to vote on legislation on our behalf, since the Internet would make it feasible for citizens to represent themselves.

This essentially eliminates the votes of anyone who doesn't care enough. This is bad because it massively empowers the fanatic fringes.

It only empowers the fringes if the rest of the general public does nothing. One would assume that people would start caring when the fanatic fringes start influencing public policy. If they still don't care, then they forfeit any right to complain.

You can start caring all you want, but if you have to have an informed opinion on every vote, you are going to run out of time, even if you do not have to spend time to do such things as bringing in the money to live from.

Also, who would propose the votes, check legislation for consistency and loopholes, etc? If you crowd-source that, chances are 100% that there will be some decisions with unwelcome consequences. If you appoint people for doing that, how is that different from letting those people make the decisions, too?

There would still be legislatures who's job is to propose and write laws, but the voting and passing of those laws could easily be shifted to the people instead of the same people that are writing the laws. This would further balance the power, and prevent the extreme amount of lobbying and special interest groups from controlling our laws.

I don't expect anybody to vote on all laws. It makes more sense for people to vote on the laws that are relevant/important to them. If I don't know anything about a certain issue, I shouldn't be voting on it anyway. This way, people would vote on issues relevant to them, and for people who don't care, then well, they don't care...

What would anyone who doesn't care enough do? If they don't vote, they increase the power of other voters. If they vote randomly, their votes would cancel each other out on average, making it as if they hadn't voted. If they vote based on what somebody or an organisation says, that person/group is empowered based on the number of followers.

This is the main issue with FPTP voting. If you wish to disempower fringes, require majority approval.

The idea of representative democracy is that the people who don't care about important issues vote for someone they trust to take care of it for them.

You largely vote not on the issues the candidate says he supports, but on how trustworthy they seem and how well their interests align with yours.

At it's best, this means that even people who are quite apathetic get properly represented.

This is exactly what happened in the UK; fortunately The People came to our collective senses and booted out Gordon Brown before he could dig us any deeper into a hole. Even then it wasn't clear cut: too many voters wanted hang onto lavish, debt-fueled spending. Those same voters march through the streets now demanding raises, generous pensions, instead of doing what the sane are doing, knuckling down to repair the gaping hole in our national wealth for the good of all.

Stability also requires a stable government. Throwing all the scoundrels out sounds good, but would probably happen (I think they are all too selfish and would play chicken down to/past the wire). Resulting in chaos at the next election - an entire elected body of unknowns with no experience.

... no experience in the current system, that is. This proposal would change that system dramatically.

Upending congress might be tumultuous, but compared to bankrupting the nation it still counts as the lesser of two evils.

That's the kind of revolution we're supposed to have when the government becomes corrupt. Also, it wouldn't be all at once; term overlaps ensure that there would be continuity.

Terms overlap only in the Senate; the entire House stands for re-election every two years.

Right and then one party looks to create a situation where the other party has more people who will be ineligible.

In a house election the incumbent almost always wins. Everything is skewed towards their favor, and lets not forget modern gerrymandering, which essentially predetermines most congressional seats.

At least then they would be playing chicken with their own re-elections not the US and World economy by proxy of the debt ceiling.

This is exactly as Plato said. The republic - in action before our very eyes.

The rate should be a factor of GDP growth - something like when GDP is growing 3%+, they can have 0 deficit, and shrinking, up to 5%.

Or just some way to save in the good times, and spend in the bad times.

But imagine motivations this could introduce: you can spend more money if you stall the economy !

That doesn't make sense. If the economy is humming, then revenues are higher and you can spend more money that way. Nobody in their right mind would borrow when you could get as much or more interest-free via tax revenue.

Maybe -- but getting the economy to grow to generate that revenue is a much harder problem than stalling it and then being allowed to borrow it.

I logged in just so I could up-vote this.