I found myself laughing at the trillion-dollar coin idea today – someone had told me about it, and like any sane person I dismissed it as some kind of odd viral silliness – but I read up on it in the Atlantic and had a good chuckle or two. Credo quia absurdum. Basically this is just an accounting sleight of hand to allow the government to sidestep the debt limit, but its absurdity makes it sound like something worthy of the end of the Roman Empire. Matthew O’Brien suggested putting a banana on the coin. Hearing the reasoning of monetary-policy people – even Paul Krugman thinks this idea is fine – makes me wonder if Andrew Jackson wasn’t right – that the best monetary policy is none at all. Of course that’s the kind of disgusted wash-our-hands-of-the-whole-thing mentality that the Republicans are hoping to engender in the public. We will have a monetary policy, whether we like it or not – and the more we wash our hands of it, the more we will have a policy for the rich only.
It is obvious that the short-term solution is to raise taxes on the rich – at least to Reagan-era levels, and if necessary to FDR levels – which will not only solve this problem, but also attack the larger and more important problem, which is that the rich are taking the wealth of this country and destroying the middle class. This is evident in every sector: reports are continuously released showing that America’s workers make massive productivity gains and get paid less for it, which is the problem in a nutshell: it no longer matters how well a job is done, the money will not go to the doer. You can see the effects even in things like changes in what we drink, where the growth industry in beverages is in extremely expensive alcohol. ”For the rich” is the growth industry everywhere: schools for the rich, travel for the rich, housing for the rich, entertainment for the rich, foods for the rich. I was walking around in Manhattan a few nights ago and was amazed at how dark the city was: the buildings were all empty. The apartments were owned by rich people, who were in one of their other homes. Why do higher taxes help this situation? Because the people who have 88% of the wealth have to pay only 86% of the taxes: in other words, every time the government goes to get money, it makes the poor a bit poorer relative to the rich. This is unconscionable.
But besides remedying government favoritism for the rich, there is another solution which would tend to solve the structural government problem, which is that spending is always going to be more popular than taxing. This really is the ultimate problem: government has an incentive to not pay for things it wants to buy. The solution is a constitutional amendment limiting the scope of legislation. It would require a clever lawyer to write it in such a way that it could not easily be bypassed, but the idea is this: it is impossible to cut a budget if you have to vote up or down on the entire thing at once. By law the votes should have to take place department by department, and further probably even in dollar increments: e.g. the constitution could say “the budget for each federal agency shall be voted on separately, the number of agencies not falling below one hundred [to prevent the consolidation of agencies to avoid the law], and no single law shall be passed authorizing spending of more than half of one percent of the total federal income for the given year”: in other words, if defense is twenty percent of the budget, it has to be voted on forty times: and with each successive vote, some congressmen will drop off. They may vote to give the defense department fifteen percent of the total budget, but then start voting no. Such a practice will give congress much greater power to resist larded budgets. Each item of lard would have to be voted on.
A similar constitutional amendment should be passed, while we are on the topic, to ensure the unity of legislation. Each issue should get its own law: much pork spending is authorized as parts of otherwise popular laws: if you want a bridge to nowhere built, you put it in as an amendment to a gun-control law. The constitution should stipulate that the clauses and amendments on bills should be “demonstrably relevant” to the main text of the bill, and subject to judicial review. The effect of such an amendment would be the same: to ensure that each individual issue gets an individual floor vote. It would also create with the stroke of a pen an entire new legal industry, scanning congressional legislation to see if each amendment is “demonstrably relevant” and filing lawsuits if there is a case to be made that they are not. Of course an amendment thus struck down could easily be reinstated as a separate law, but it would have to go through the democratic process again.
Such amendments would greatly increase the number of congressional votes, and would thus empower the congressional voters to act independently: ultimately you would not need to get mere committee approval for your amendment, you would need to get a majority of the House and Senate and a presidential signature for each piece of pork. Any debt hawks who are truly serious about this problem should put their efforts here.