4 Draconian Ways to Fix Washington

If politicians can’t run the government effectively, let’s turn it over to Goldman Sachs.

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There's obviously a problem in Washington. The U.S. government is the most profligate spender in the world, earning enough revenue to cover just 57 percent of what it spends. It borrows the rest, stacking an unfathomable pile of debt on the backs of future Americans. Everybody knows this is uncool, but it would be inconvenient to do anything about it right now. So nothing changes.

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Democrats, Republicans, and Tea Partiers all think they have a magical solution. But they can't agree, so instead of fixing the mismatch between income and spending the way a responsible family or business would, politicians have big fights over small issues and accomplish nothing of significance. The problem just gets worse, or course, making the government so dysfunctional it can barely keep itself running. So maybe we need some more dramatic, unconventional ideas about how to fix the government. Here are four:

Get the whole debt crisis started already. We keep hearing about the panic that will ensue when investors lose confidence in Treasury securities, rating agencies downgrade U.S. debt, borrowing rates skyrocket, and Washington suddenly runs short of cash, like Greece or Ireland. But it keeps not happening, which gives the whole issue a Chicken-Little quality, making voters suspicious of the doomsayers and the big changes they say are necessary. And as we all know, without a crisis, politicians will continue to vituperate, do nothing meaningful, and drive citizens mad with their hypocrisy.

So let's tempt fate and see what happens if we rapidly drive the national debt to 100 percent of GDP, 200 percent, or even 500 percent. Here's how: Congress should pass legislation suspending all tax collections indefinitely, which would please Republicans, while hiring every unemployed person in the country, which would satisfy Democrats. The government would have no income and skyrocketing costs, but that's okay, because it would simply borrow the money to pay for everything. If that became a problem, then Congress for once would have a genuine crisis to solve—and they would solve it, because if they didn't, they wouldn't get paid. But who knows, maybe we'd happily discover that all this scary talk about paying down the debt is a big hoax, and we really can live on borrowed money forever, because the U.S. of A. is so important that the rest of the world is willing to pay us to spend.

[See how to tell when America's debt crisis gets serious.]

Create some low-cost competition. When did a monopoly ever provide high-quality products and great service, at the lowest possible price? Never, that's when. So why should we expect any better from the U.S. government? Let's face it: As the sole provider of national government to citizens of the United States, Washington enjoys one of the greatest monopolies of all time, because it gets to enforce its own status as single provider. That's like allowing Microsoft or Ticketmaster to run the Justice Department's antitrust division.

Previous efforts to establish a competing government, like in 1861, haven't succeeded, but those were ham-handed efforts undertaken by amateurs who didn't have the tools that today's modern businesses have. Besides, today's enlightened Congress is much more open to capitalist solutions. So Congress should pass legislation that lowers the barriers to entry for entrepreneurs wishing to set up their own federal government, to compete with Washington. The airline industry might serve as a useful model. A few basic services would be required, but the new governments would be free to force down costs and price their services however they choose. Without a doubt, savvy entrepreneurs running GovernRite or LawsForLess.com would be able to undercut Washington's costs and outshine its offerings, forcing the incumbent government to become more efficient or risk going out of business altogether.

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Instead of setting up shop in high-cost areas like Washington, D.C., the low-cost governments might establish headquarters in North Dakota or New Mexico, and they'd be free to outsource as much of their work as possible to India, Vietnam, the Philippines, or whoever could do it most cheaply. Some people might still choose to patronize the high-cost Washington government, paying high annual fees for a full-service bureaucracy and a familiar, if tarnished, brand name. But others might patronize a new, upstart government that charged, say, a low annual fee for basic citizenship rights, then charged for other services a la carte, such as the use of highways, defense against terrorists, or a Social-Security-type pension. The beauty of demand-driven competition for government is that it would let consumers choose the amount of government they want, and pay only for what they get. There might even be government-free zones administered and policed by nobody, where the heartiest libertarians could experiment with a new utopia.

Pay the press to stay home. If we can pay farmers not to farm, then surely we can pay reporters not to report the antics of publicity-starved politicians. Sure, people at home might desperately miss their hourly updates on the latest political tiff, but think for a moment about whether Democrats and Republicans would fight endless, pointless proxy battles over tiny fractions of government spending if nobody were watching. Every parent knows what would happen, because it's exactly the same as a child who acts out as long as you fuss over him—then pipes down when you stop paying attention.

If every meeting, gesture, remark, and procedural turn weren't regurgitated by throngs of media outlets, Congress might work the way everybody else does: By trying to accomplish the most in the least amount of time. We might even have a balanced budget by now. Plus, this plan would be cheap. Journalists don't earn that much to start with, and an increasing number even work for free. So it wouldn't take much taxpayer money to persuade journalists to stay at home, where they could send tweets or play Farmville all day. There would be a few diehards intent on reporting the news, even if they could earn more by not doing it. Here's how to deal with that: Require all working journalists to post their stories to a webite viewers had to pay for. That would ensure nobody got the news.

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Let Goldman Sachs run it. The marquee investment bank might be a vampire squid with tentacles that reach into every facet of American life—but so is the federal government. And unlike Uncle Sam, Goldman Sachs actually makes money at its squidwork. So instead of railing against Wall Street's most successful bank, let's turn the government over to it. If Goldman can make money selling self-destructing, collateralized-debt obligations and other double-secret derivatives, then surely it can find a way to squeeze a profit out of the underfunded Medicare program or green-energy initiatives. A little financial innovation might do wonders for our government. Any innovation would, actually.

Twitter: @rickjnewman