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We must come up with a way to reduce the budget deficit in the next few months or the U.S. will lead the world into another financial armageddon. As the Biden administration entrenches proposals to increase taxes on the wealthy and corporations, and House Republicans are fixated primarily on gutting essential programs, we must remember that there is a free (if not simple) fix to our problems.
The Democrats and Republicans can overcome their standoff over the debt ceiling by following the lead of other innovative nations in creating a “digital republic.” Automating government services does just what the Republicans are asking for: reduces the size of the government. Doing so also meets the Democrats’ demand to maintain spending.
On Jan. 19, the United States reached its debt ceiling limit of $31.318 trillion. “Extraordinary” measures are being taken to keep the government functioning, but we are now driving on an empty tank. Normally, bipartisan negotiations lead to some sort of compromise to keep the government functioning, but a compromise is much less likely now that the House Speaker is beholden to right-wing members of his party. President Biden has indicated that he will not negotiate much on cuts, leading to the possibility that the United States will default on its (substantial) debt. A global financial meltdown is a real possibility.
But there is a third way: Reduce administrative bloat by following Estonia’s lead in building a digital republic. In Estonia, nearly every service the government offers — from health insurance to welfare — can be done from home without ever needing to interface with a human. There are no complicated forms for welfare, no financial aid applications and no lines at the Department of Motor Vehicles. In fact, these agencies hardly have any staff at all, greatly reducing the cost of doing business. Administrative inefficiency in the health sector alone could save $1 trillion over 10 years.
A digital republic is achieved by providing a unique and uniquely secure identity card to each citizen. Their system is even more secure than the newfangled efforts by Apple, Google and Microsoft to use biometric data rather than passwords for account logins. The Russians have been unsuccessfully trying to hack Estonia’s system for years.
Once everyone has a single way of logging into the system, they can simply opt-in to digital services or not. Nearly everyone does, though some elderly and disabled people still require assistance.
Imagine the possibilities of a fully automated government. Of course, there is little need for administrative workers or tax-funded pensions. Hospitals and clinics are currently filled with staff that deals with complicated electronic transfers of medical records and negotiations with insurers, work that is subsidized with public dollars. Much of this would vanish. Small businesses could get a loan with a click of the mouse, expanding the economy and the tax base. With all an entrepreneur’s data online, it is possible to open the door to a new business in days, rather than months. So, the private sector is a big winner, too.
There is something for everyone — more tax revenue and a smaller government, at no additional cost.
By allowing dollars to be tracked electronically, corruption is curbed, potentially including the $60 billion lost annually through Medicare fraud. Over the long term of government actuarial calculations, a digital republic could save trillions of taxpayer dollars while also generating billions more in taxpayer revenue.
Even so, the task isn’t easy. To form a digital society, a large investment is needed. The federal system of the United States is at least as big of a hurdle, as battles for Real ID driver’s licenses have shown. While a digital society protects privacy in ways that our current system cannot, people will certainly take issue with any digital identity scheme. But it can be done. Sweden and South Korea have done it. India is doing it. If these nations can do it, America can too.
If the budget deficit impasse is eventually solved, a reckoning with the enormous amount of waste and redundancy in both the private and public sectors of American society must come eventually. Why not use the challenge that we are facing with the debt ceiling as an opportunity to fix our bureaucratic systems?
Peter Muennig, MD, MPH, is a professor of Health Policy and Management at the Columbia University Mailman School of Public Health. He has previously published on the topic of streamlined government using digital identities. He is the author of the article, “Futureproofing Social Support Policies for Population Health.”
Politics of the United States
REAL ID Act
United States debt ceiling
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