Category Archives: Regulation

The National Budget under Direct Democracy

 The so-called “power of the purse,” one among an enumerated few bestowed upon Congress in the Founders’ Constitution, has long since proven, to the surprise no doubt of fewer still, by far the most corrupting. Indeed this indispensable authority to appropriate tax revenue now represents the greatest threat to the future prospects of this nation. Naturally then it also constitutes one of the more challenging powers to tame and to integrate into the faithful service of a national system of direct democracy.

Currently many revenues raised and already appropriated by Congress may yet be blocked by a handful of powerful budget committee chairpersons  — according to whatever criteria might force or stay their hands. But neither these “gatekeepers,” nor even the committees over which they preside, were ever mentioned by the Founders in the Constitution: These were the innovations of subsequent Congresses.

In spite of — or perhaps owing to — these and other congressional innovations,  rare now are any full, year-round budgets appropriated and authorized by the various committees of Congress. Instead, many may pass but one continuing resolution after another in order to ensure the funding of the many agencies, departments and programs of the federal government.

And this proposed direct democracy, at least with respect to the federal budget, is itself a form of national continuing resolution.

All other departments, agencies, offices and courts of law not superseded or abrogated by this Constitution shall retain the same allotted percentage of public revenues, powers of regulation, oversight and enforcement, and restrictions under law as established prior to ratification, until a proposition alternative for reform of that government body or office, introduced by the People or by the principal officer of the government body or office in question, certified in at least ninety-five percent of precincts subject to its oversight and authority, receives an aggregate of fifty-one percent of votes among said precincts.

(from Article 1, Section 4)

As the priorities of the voting public naturally shift over time, this budgetary “frozen pie chart” might be altered in any national electoral initiative — altered perhaps concurrently with the election of a presidential candidate as a new form of electoral mandate akin to today’s party platform: Thus, with the election of a given candidate the defense segment of the budget, which now stands near 24% of the whole, might be reduced to the 22% health care is now allotted and vice versa.

If these important percentages stood unaltered longer than many might like, the actual revenues raised and spent, as ever, would depend upon existing fees and tax rates. The proposed constitution provides for its own major source of revenue akin to the abolished income tax. (see The Immoral Income Tax and Direct Democracy) A property usage fee, specifically, would serve as a progressive form of revenue generator that, unlike the income tax, neither discourages small business enterprise nor encourages mass resource exploitation and blind urban sprawl.

Some might believe that budgetary appropriations ought to be much more fluid, subject to constant voter correction. But these governmental expenditures are not mere figures on a page: resources are committed and lives changed. Were daily polls to decide the fate of previously authorized, let alone disbursed, government expenditures, the ensuing waste of resources would no doubt prove worse than what prevails today.

Yet the national budget need not be balanced from year to year, so long as debts arising from unforeseeable exigencies were borne by current citizens rather than passed on to future generations. Thus, a constitutional amendment explicitly precludes the transfer of debt:

Amendment X – No law enacted by electoral initiative or otherwise shall establish a debt, project or fiscal program where the financing thereof would obligate future citizens to the financial commitments of current voters. Appropriations shall be drawn from revenues collected within one year of their appropriation through floating debt and the collection of these fees and revenues only:

-Usage fees levied upon persons whose activities degrade or monopolize public property;
-Usage fees levied upon persons enjoying exclusive use of land, in proportion to its acreage and the volume, mass and scarcity of natural resources therein;
-Usage fees levied upon foreign governments for involvement of United States military personnel, equipment or weaponry in operations outside the territory of the United States, at the request of said governments, which would otherwise be the responsibility of any sovereign nation to itself;
-Misusage fees levied upon persons whose activities, whether intentional or negligent, damage public property;
-Misusage fees levied upon persons whose activities damage the private property of another person, or impede its exclusive use by barring lawful access to it, or operation of it; physically altering it or its value; or otherwise converting or making improbable its peaceable, lawful, exclusive enjoyment; thereby necessitating the intervention of law enforcement or courts of law;
-Misusage fees levied upon persons who assume unnecessary risks or file frivolous complaints that require emergency public services or courts of law;
-Sales of forfeited, seized property;
-Sales of goods processed or manufactured by state-confined workers; or revenues from the contracting-out of their services;
-Sales of government property to allies of the United States, upon a two-thirds majority vote among the Governors and a unanimous vote between the President and the Cabinet—or the Defense Cabinet, in the case of military property;
-Duties, imposts and excises;
-Safety-inspection and handling charges;
-Any fiscal-program income deduction annually re-authorized by electoral initiative.

All fees shall reflect the actual duration and costs of use or misuse, so that collections in anticipation of use may necessitate reimbursement.

No law enacted by precinct electoral initiative shall institute or increase an appropriation from revenues derived in part or in full from another precinct, unless with a fifty-one percent consenting vote within the latter precinct, or unless authorized by this Constitution; nor withhold or disburse revenues lawfully collected for and due to a city, county or state government, or the federal government.

While congressional committees and their distinguished chairs would no longer hold the national purse strings, outlays of revenues would yet require close supervision and control. That critical supervisory role would be granted to the extra-congressional organizations already established under the current system — e.g. the SEC, IRS, FTC — and duly reauthorized by the incoming Cabinet, a process shepherded by the new Attorney General — now an elected official running on the same ticket with the President and the Vice President, third in succession to the highest office. (see The Presidency, the Vice Presidency and Direct Democracy)

Amendment XI – The power to appropriate revenues and the exercise of oversight, investigative and regulatory authority formerly delegated to the United States Congress by the original Constitution, where not previously delegated by the former, shall be delegated by the Attorney General to, and in turn by, the appropriate executive appointees, whose official acts may be halted by the President, the Attorney General, or by a three-fifths majority of the Governors, when deemed unlawful, wasteful or predominantly political in nature…

In most cases, the People themselves surely lack the time and the enduring interest to study the issues concerned, to weigh their competing priorities, and to stipulate the requirements for each prospective budgetary appropriation. The proliferation of the internet, doubtless, will broaden the capacity of the voting public to determine even the minutiae of appropriations democratically; but until such time as a secure, reliable system were designed, approved, and disseminated, these responsibilities ought remain with dedicated professionals. 

The President, insofar as the budget were concerned, would be only a coequal to the Attorney General and the Governors of the States and would retain the veto power only over those legislative measures enacted as regulations by the agencies created or reauthorized by an acting Cabinet for that task.

We the People, however, through our electoral initiative process, would inherit the authority not only to enact and to alter existing statutory law; but, in rare instances and with rarer consensuses — to alter the American political system itself.

Human Nature and Regulation

 When the Founding Fathers within Article 1 Section 8 of the newly signed Constitution granted to Congress the power to regulate commerce, these distinguished gentlemen naturally knew nothing of gasoline, electricity, or bacteria. At the time, workplace and product safety standards constituted for them nary an afterthought. In a nation built upon the backs of slaves this hardly seems surprising.

But after years watching the nation falter under the Articles of Confederation — years of state to state tariff wars, deep recession with dire inflation in state currencies, and both rising debt and unremitted taxes — simply wresting from these foundering states their power to erect tax barriers that impeded foreign and interstate trade was one of their most pressing goals.

Yet in modern America we taxpayers now spend over $2.5 trillion per year footing the bill for both government regulatory enforcement and for public and private compliance.

Possessed of today’s scientific knowledge, would our Founders have designed such an economic burden as a part of their “original intent?”

Must we yet speculate? They died.

We the People must today answer for ourselves which if any measures are necessary and which would best ensure the safety of honest, productive citizens in the free exchange of goods and services — in our daily commerce. No doubt every political ideology will have its own argument for the proper regulator — whether government agencies, private associations — or no regulators at all..

But within both the public and private sectors the one inescapable constant is human nature itself: the power corrupts us; favoritism takes hold; complacency grows; and money talks.  Behold the current global financial crisis. Moody’s Corporation and Standard & Poor’s, two private rating services, were no more trustworthy or reliable than the SEC, a government regulatory agency, in warning Americans of our impending financial securities meltdown.

Fallible human beings man every organization, public and private.

Is the answer then no regulation at all? Ought we discover then only after a high-rise apartment collapsed that the foundation was laid with faulty concrete? Are compensatory lawsuits enough justice, or low rents enough inducement, for the harm visited upon honest, unwitting citizens and their surviving relatives?

Any regulator, public or private, might at any time prove derelict in its duties. But this cannot be reason enough to forsake reasonable public standards, particularly within industries where the public safety is at risk.

In the IT world we see competing models of innovation with widely divergent industry standards: the closed-source operating system and the open-source system. Public safety is nowhere here at risk; and innovation is thriving without such regulation. Let then the hand of the free market and the demand of the consumer determine the course of commerce.

Required is a common-sense rule of thumb, a rule with which to gauge the propriety of imposing a regulation: Does it directly, materially enhance public safety while minimizing costs of compliance — minimized to a degree that would still justify the enterprise in the first place?

But here we return to our human nature: Who shall write such regulations and for which industries? Who shall enforce them? And shall any citizens enjoy immunity from them? What will be the consequences for over-regulation, for under-regulation, and for non-compliance?

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First and most importantly, no one must be immune from the law.

And it would be public employees not private interests or even associations of private interests who surely would make for the most impartial enforcers of public safety regulations.  Private self-governance of public safety, where profit and market share would always be in play, more widely opens a backdoor to our darker human nature.

Industry experts, logically, ought to write the specific standards within their respective fields of mastery. And our own elected representatives, each subject to the recall vote, ought to select such experts as impartially as this our human nature allows.

Finally, we the People, as jurors within the courts of law, will decide both culpability and consequences for the misuse and violation of such regulations.

And the rule of thumb?

No administrative rule or regulation, except those indispensable to the protection of public safety, shall be enforceable where, regarding the regulated, a presumption of malice, neglect, or imbecility inheres to the requirements thereof: But any injury to person or to property, private or public, whose proximate cause is a business or governmental standard or procedure violative of due care and common sense shall nullify the limited liability or the official immunity of the authorizing and enforcing officers, respectively, both in civil and in criminal suits.

(from Amendment XIII)

Some might object here that revocation of the limited liability of CEOs and the official immunity of politicians opens wide the front door to endless litigation. But is this not what hurts us most today — their immunity from accountability?

The broader expansion of citizen accountability — of personal accountability — will serve as the foundation of our collective moral growth. No citizen, and particularly not those in positions of responsibility and power, ought enjoy immunity from our collective judgments and from their own accountability.

So, what then would constitute “due care and common sense?” That would be a definition in our own collective hands, as jurors at trial, to decide — a de facto form of common law for we the People. And this same critical judgment would be brought full circle against ourselves and our own frivolous lawsuits by a provision written as a revenue source into this new direct democracy constitution:

Misusage fees levied upon persons who assume unnecessary risks or file frivolous complaints that require emergency public services or courts of law;

(from Amendment X)