Back in the mid 2000s the housing market in the United States was swelling at an unprecedented rate, which ultimately proved unsustainable. The bubble ruptured in 2007, gushing its toxic muck into the sea of the global economy, poisoning the shore of every industry with the pestilent surge of recession. As industries restructured to survive the fiscal famine, governments were forced to make difficult and unpopular choices, including the bail out of some companies that were deemed, “too big to fail.”

There is a tendency for humans to be careless with plenty, prudent with little. The more we have, the less we appreciate it – this is who we are. Wealth and waste go hand in hand, for as we acquire more things their value must diminish, which makes us less cautious. In economics this phenomenon is known as supply and demand. No one understands this concept more poorly than special interest groups.

When times are tough we are confined to contentment and obliged to be grateful, but not these special interest groups. While many are satisfied with mere survival, they continue to relentlessly pound the doors of government offices, demanding ever more, ever more. Because of their narrow field of vision, special interest groups care not for the plight of others, but, like ravenous beasts ravaging a kill, they strive to plunge their jaws into the bloody carcass of public funds. One can’t help but wonder how much money these groups would take if given a blank check, since they seem to have no problem forcing the government into deficit. What they fail to realize is that the money they receive comes at the expense of other programs, even at the expense of their own future funding.

Governments are constantly tangled up in labor disputes and collective bargaining, attempting to satisfy those persistent pests without compromising their budget. It seems like every time we turn on the news there’s some new program aimed at washing stray cats or launching elderly citizens into space. As great as those ideas are, government funds do have a limit and at some point they must decline such programs. Fortunately for special interest groups, public support can often sway the government into coughing up the cash. By using ad campaigns, job action and strikes, these groups can rally weak-minded citizens to their cause. But even after an agreement is reached, there’s no doubt that they will be back at the table, begging for more money to cover the increase in cost of living and inflation.

So how can this cycle be broken? There must be a way to permanently stave off the endless demands and protect future generations from enduring the consequences of our fiscal frailty. The answer is by assigning funding based on a percentage of GDP, tax revenue and/or inflation.

Public programs and wages would receive funding as a percentage of projected tax revenue every year. By dividing up the pie in percentages, the size of the slice is based on the size of the pie, so there would be no quarrel over the portion received. By agreeing to a percentage of the total budget, public programs and wages increase with inflation and economic growth, requiring no renegotiation for increased compensation.

The private sector is more complicated, but there are models which allow employees to share in the profit of their company. Private sector wages should, at minimum, be tied to inflation. Minimum wage, however, is dictated by the government and would be set to a rate based inflation, as well as the economic performance of the nation, state or province.

The idea is simple: instead of constantly renegotiating wages and funding, tie those things to the same thing that dictates the available funds. Anything else would be neither consistent, Norfair.