Let's Take On Our Federal Budget The Chinese Way

Sometime later this year, the U.S. government is forecasted to hit its debt ceiling again, and the federal budget will once again occupy the attention of Washington as well as voters since it promises to be a hot presidential election topic.  However, it is now quite widely known that the strongest factions with the most lobbying support win out, while the public loses.  To continue with this maddening process is to endorse the status quo and embrace ‘business as usual’ without engaging in serious planning for the long-term health of the nation’s economy.

One thing that the Chinese leaders have done quite well—and something that the U.S. government must address—is planning for the economic long-term.  China has a fully articulated vision for their future through the Five Year Plan, in which the leaders lay out their priorities and performance targets for a whole host of economic sectors.  While many Americans associate Five-Year plans with failed central planning, today’s Five Year Plan differs from the Five Year Plans of Mao’s time in that the Central Government no longer controls every factor of production.   Instead, they lay out government priorities and put incentives in place for the private sector to carry them out for profit .  While it is probably impossible to eliminate industry influences, the very act of publishing targets, spending priorities, and underlying assumptions shines a much needed light that helps deter corruption.
 
In the current Five Year Plan, one of their major priorities is to develop a greener economy.  Specifically, China’s goal for 2015 is to cut carbon emissions per unit of GDP by 17% and increase energy efficiency levels by 16%.  To accomplish this, they further detail the levels of investment through government grants in green technology, the types of tax incentives for renewable energy, and the range of tax hikes for high pollution industries.  This plan has made China (arguably), the leader in solar technology production and has sparked major projects in biomass research.
 
The U.S. can learn from the Chinese Five Year Plan by modifying and adopting elements of the Chinese Five Year Plan into the Office of Management and Budget’s planning process. This would involve creating real performance benchmarks for the various government agencies when the President starts his four-year term. Although the Obama administration has mandated performance targets for some entitlement programs, this best practice can be expanded to other areas of government. This would save America time and badly needed funds by aligning government objectives with the wishes of citizens and taxpayers and introduce more transparency and efficiency in its operations.