Debt-and-Deficits Essay Contest Honorariums
Congrats to all the winners!
31 people entered this sprint’s contest, and we’re giving out three top prizes and eight honorariums — $6,400 in total. Across the 28 entries published openly on Substack, 542 likes, 250 comments and 195 restacks were accrued — and likely tens of thousands of views.
The top three essays will be announced via cross-post to Boyd subscribers over the coming ~week. This post is for the eight honorariums, which took a lot of deliberating on to narrow down.
We want to again thank everyone who participated and encourage even more people to participate in our future essay contests!
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Synthetic Civilization — “The Tax State Reads Wages. It Cannot Read Compute.“
The argument here was that AI is moving income into forms that legacy tax machinery was never built to observe — accruing “to capital, to equity, to the owners of compute, and increasingly to autonomous systems whose output has no wage line at all.”
The essay’s answer for commensurate tax revenue with AI-derived growth is Federal Compute Withholding, with everything raised used to cut payroll taxes on labor. The implementation was thoroughly thought through, down to a rate that only rises if labor’s share of income actually falls.
The design is revenue-neutral on purpose and closes none of the deficit. But we found the essay compelling because it flagged what seems to be a real risk — tax receipts actually falling as output grows — and provided a well-fleshed-out solution.
Annoying Peasant — “DOGE, Done Right“
This essay was just what the doctor ordered for us. We lamented DOGE several times throughout the sprint for taking the wrong approach and amounting to slopulist cope.
AP’s version of addressing “waste, fraud, and abuse” was to flip GAO recommendations from opt-in to opt-out, where agencies must implement anything with proven financial benefit within two years, and stonewalling becomes a fireable offense. Paired with an IRS funded to close the tax gap, he pegs it at $2-4 trillion in savings over ten years.
Fractal Inklings — “The Generational Deal“
One statement in this essay really stood out, and that is that anyone selling you a painless version of fiscal course-correction is lying. Then the author takes his own advice: the plan costs $17 trillion by his own math, and his own cohort pays.
What this would fund is the end of pay-as-you-go replaced by a sovereign wealth fund built to be politically untouchable, with its returns eventually seeding retirement accounts citizens own outright.
Eli Sheets — “Staying Is Nowhere”
This was among the least exciting yet most coherent essays.
The thesis is that there’s no single fix, only a portfolio. The compelling part was that every proposal was specified down to the level a staffer could draft from. Not “reform Medicare Advantage” but coding intensity, favorable selection and the spending gap MedPAC has documented.
It also ruled out holding rates down through monetary policy, because it would damage the dollar and breed the complacency that got us here — which seems unequivocally true based on the research we did over the course of the sprint.
Overall, just a really impressive policy paper.
Performative Bafflement — “Achieving fiscal solvency by not letting private equity bros torture grandma to death“
This was a banger. It said many of the quiet parts out loud, and ultimately landed on the rather unsavory prescription of assisted dying, incentivized and at scale.
But before the essay got dark, it priced out every popular fix: seizing all billionaire wealth covers a third of one year's deficit, and means-testing, corporate taxes, and retirement at 73 run about $300 billion each. It also shined a light on the abuses found in PE-owned healthcare facilities, along with hospices recruiting Alzheimer's patients because they tend to outlive the six-month billing window.
Though the prescription may be contestable on grounds of “social cohesion” and whatnot, we really appreciated this essay for its boldness and its research receipts.
Brian Moore — “Project Hail Mary Zero“
This essay went after healthcare costs upstream of the payment system, at metabolic disease, on the logic that the cheapest way to stop paying for something is for fewer people to need it. Around it he stacks the build-side agenda: barriers to energy generation removed, density-limiting zoning killed, defense procurement rebuilt around drones. Energy is productivity, productivity is tax revenue, revenue is how you avoid a crisis. Overall this was a very well-rounded buffet of proposals.
Reid — “We’re not going to solve the debt crisis“
Reid had an idea nobody else had: CaaS — sell governance and security as a service, one country to another. The US supplies rule of law, contract enforcement and protection to willing developing nations in exchange for resource rights and a share of the growth that follows.
His claim is that cheap surveillance has collapsed the manpower cost that made this unprofitable historically. But the demand is real — five West African heads of state were at the White House last summer pitching something close to it.
AG Johnson — “Twenty-Five (Mostly) Terrible Ideas to Fix America’s Debt Problem“
This one got high marks for creativity. The meta-insight here is that when you completely reframe the approach, unironically, you start to think outside the box and may actually come up with an interesting solution or two.
The most serious one in the pile, premised on the notion that neither party can cut alone without getting slaughtered for it, and that the only fix that survives politics is one where both share the blame: a bigger, uglier Simpson-Bowles.
Congratulations to all eight, and thanks to everyone who entered. 31 essays is a lot of unpaid, careful work on a problem most people would rather not look at or talk about.
Again, warmest congratulation to Boyd for focusing attention on our acute fiscal disfunction, a "Fiscal Trap"
Here are a few comments on some of the entries mentioned in this post:
Staying Is Nowhere
. The proposals for restructuring Social Security and Medicare benefits look good, but only reduce not eliminate borrowing to pay for these benefits. They need to be combined with dedicated revenue increases – a VAT, which does not “suffocating” (does not have high dead weight loss) at a rate to zero out the deficit on these items
. Exchanging subsidies for tariffs reduces one kind of economic distortion. A better solution is the eliminate taxation of business income entirely instead of subsidizing certain uses. This can be budget neutral by appropriate adjustment in the tax rates on personal consumption. [ https://thomaslhutcheson.substack.com/p/beyond-the-fiscal-trap ]
. Gas Tax: A general road user fee based on milage and vehicle weight is better aligned with costs of building and maintaining highway infrastructure. It is probably administratively cheaper for this to be collected at the Federal level, but most shoud be returned to the states as the Federal government ceases to fund highway infrastructure.
. Social Security (and Medicare) Payroll taxes: These should just be replaced by a VAT. Taxing income in any form is a bad idea.
. SALT deductions are consistent with taxing personal consumption, not income as tax payments are not consumption. In a personal consumption tax system, they are just a kind of non-consumption, like savings.
. Remittance tax. There is no reason to single out this form of consumption from any other.
DOGE, Done Right
Sadly, this proposed solution starts out with typical chart-phobia and completely fails to explain why debt of X% of GDP is a problem. There I reason it does not is that it cannot. I cannot because “debt” of X% of GDP is NOT a problem.
The problem is that over the years borrowing has exceeded public investment (defined at activities with early costs and later benefits with discounted net benefits greater than zero). The reason _that_ is a problem is that the procedure reduces future growth. Borrow enough in excess of investment and growth halts. Borrow more and is it turns negative. These are bad whatever the debt as a percent of GDP is.
Would the author’s proposed solution result in less borrowing in excess of investment? Quite probably some would and the author is to be commended for the proposals But I think having a clear conception of why they are good [See https://thomaslhutcheson.substack.com/p/escaping-a-fiscal-trap] would help.
The Tax State Reads Wages. It Cannot Read Compute.
The analysis is sound but the policy conclusion is not. There is no need to invent an alternative -- compute -- to taxing income and less to taxing only wage income; it has already been invented: taxing consumption (income - saving/investment). If we were totally indifferent to tax regressivity, we could raise all revenue with a VAT. I think we should not be indifferent and so think we should also tax personal consumption at progressive rates, greater consumption, higher rates. [See: https://thomaslhutcheson.substack.com/p/beyond-the-fiscal-trap]