Building a Bit-Based Bureaucracy

The Problem

A common song heard from seaboard to seaboard laments the scope and growth of the federal bureaucracy. Indeed, ever since the New Deal fundamentally changed the relationship between Congress and the executive, agencies have gradually assumed enough lawmaking purview to challenge the House and Senate as a de facto third chamber. Conservatives fairly decry broad lawmaking authority delegated to the Article II branch; conversely, those on the left justly maintain that the enforcement of detailed and complex law requires a special expertise often absent from the Capitol. This is a consequential debate. Unlike statutory interpretation, which can afford to bend to political whims, the fair execution of federal law is predicated on consistency and should eschew mercurial application. Thus the question stands: is an autonomous bureaucracy necessary and proper for the modern Republic, or has the executive branch’s growth exceeded its constitutional prerogative?  

President Trump argues ardently for the latter. Throughout his campaign, he repeatedly proposed drastic measures to curtail the regulatory state; one such measure sought to repeal two regulations for every new one drafted. Another perhaps more effective measure—one currently playing out before our eyes—entails leaving important department offices vacant in order to stymy the regulatory process. Regardless of method, his goal is obvious: to return legislative power from his agencies back to the popular branch. His MO might be brash and a bit amateurish; however, he is arguably in the right. It is easy to think of the president as the CEO of the executive branch (and therefore default chief of all agencies). This is slightly erroneous: many executive nominations require consent by the Senate; some are jointly overseen by the Office of the President and a topical congressional committee; and some are significantly independent and thus seldom react to the waves of quadrennially shifting tides. Furthermore, because most of the administrative state owes its existence to progressive liberals in the mid-20th century, its natural bias is left, so conservative presidents are less likely to wield a strong mandate over subordinates than their liberal counterparts. This adds a new dimension to the question: can the president faithfully execute the law if his enforcers are improperly biased and relatively recalcitrant? When a Republican president oversees a leftist bureaucracy, it’s hard to argue that he can wield the very powers bestowed to him by the Constitution. So we shouldn’t fault those who want to return legislative power to the legislative branch.

 

The President’s critics, on the other hand, are wary of efforts taken to strip the bureaucracy of its newfound authority and return power to a Congress plagued by historically low approval ratings. Like their conservative opponents, they too should not be blamed for their beliefs. There is a good reason so much power has accrued in the hands of faceless bureaucrats: our representatives have, over the years, deemed themselves too lazy and incompetent to properly enact the highly specific footnotes of tailored law.

Therein lies the solution: fix the competency of Congress. Elect younger representatives. Send qualified delegates to Washington. Ensure Capitol Hill is home to no motley crew, but rather a group sufficiently knowledgeable to avoid delegating its constitutional authority to another branch.

 

Blockchain as a Solution

 

It’s fairly common to hear members of congress bicker the phrases, “cut taxes”, “support our troops”, “tax the rich”. With control the the purse strings the discussion is commonly based on the premise of a zero-sum game, by which billions are shifted from one department to the next. The super-ordinate aims of programs are neglected in favor of rhetoric that insinuates funds are being “given” or “taken away” from groups.

The “War on Poverty”, for example, is a war we’ve been losing for over 50 years. The last census reported 151 million Americans receive a government entitlement. Since 1964 the poverty level of Americans aged 18-64 has actually increased from 10.5% to 14.5%. The cost of this increase to taxpayers? In FY 2016 alone, Medicare, Medicaid, Social Security, Obamacare, SNAP, SSI and other entitlement programs cost the government $2.59 Trillion, with economist stating these policies have cost taxpayers at least $22T since their inception.

With some simple algebra we can calculate that the $2,600,000,000,000 allocated to programs combating poverty (yearly), divided by the 45,000,000 Americans living at the poverty level. Thus, we spend roughly $57,777 per person to combat poverty. To put this number in perspective, the median income (as reported by the U.S. Census Bureau Sept. 2017) in the U.S. is $59,039. So, if the government simply paid out welfare benefits directly to those in poverty, the war on poverty would be swiftly won.

The reason this money never sees the people who need it most, is bureaucratic overhead. Pensions, salaries, insurance plans, and outreach programs eat away at the allotment of funds, with little incentive to streamline, and every incentive to expand in scope. Blockchain, however offers a palatable solution to bureaucracy, with the introduction of a network that runs itself. If EBT were a cryptocurrency, payouts would be automatic, instant, and oversight-free. In place of paper case files, the blockchain ledger would freely log transactions, verify payments, and track spending patterns.

If the government wanted to crowdfund America out of poverty, money allocated to these programs (yearly) could be moved into a cryptocurrency like Ethereum. Paired with a press-release, this simple act (proving U.S. recognition of these assets) could easily increase the currency’s value by a factor of 10, as investors worldwide jump on the validation. Overnight, the $57,777 set aside could be worth over $500,000. The $2.6T allocation, now $26T, would be enough to pay off the deficit, while paying out every American under the poverty line a lump sum of $100,000 to keep them afloat. Wisely invested, (or managed with “smart” financial tools), 7-10% yearly returns would pay the rent and utilities on a $500/month apartment, while allowing recipients to save the principle for a rainy day.  

 

Written by William Harrison & Mark Kilaghbian