Accountability as Policy: Ending Soft Budgets and Public Debt

This study proposes a concrete policy architecture based on three interlocking mechanisms: pure performance-based pay with zero fixed salaries, progressive detaxation of productive activity, and systematic deregulation. It introduces strict personal liability rules for politicians—public debt must be cleared within twelve months and never carried beyond term limits, with repayment or criminal accountability for failure, and no exemptions for sympathetic categories. Soft budgets are treated as a core institutional failure. Drawing on empirical evidence from performance-pay studies, tax reforms, occupational licensing, telecommunications liberalization, private higher-education expansion, high-powered residual contracts, and historical low-tax open-entry regimes, the work shows that residual-claim incentives, lower extraction, and open entry produce directional gains in productivity, employment, and opportunity. Partial reform yields partial results; only joint operation generates compounding effects. The framework addresses standard objections on inequality, vulnerability, externalities, and transition costs, locating protection of the vulnerable in voluntary institutions rather than soft budgets. Long-term private investment, charity, and education are strengthened, not abolished. The practical path is sequential constraint of soft budgets and artificial barriers, moving toward functional minarchy without system collapse.