If the amount of expenditure is fixed and there is no meritocracy involved, so there is no way someone can expand that amount, and this amount is similar to the medium wage in a country of the first world, then almost the entire economy will need to be controlled by the state. That’s because producing goods and services needs investments, more than the average person can effort. If there are no rich people to invest money on it, then only the government can, or the economy will eventually collapse to a pre-industrial era. Otherwise there should be the possibility to exceed this limit only for some not-individual legal entities, but speculate on this and if it can be exploited needs a lot more assumptions.
There are others things a government can realistically do to reduce the social inequality without going so far, like giving a job for every unemployed person with the right amount of working hours and salary (and possibly without competing with the private sector), which is supported today by a lot of post Keynesian academics and is fully compatible with capitalism in a modern industrialized country.
Something important to consider about the modern industrialized economies, as opposed to e.g., pre-industrial societies, is that the interest of riches and of the middle class are much closer; having an amount of money distributed over all the citizens is appropriate to ensure that sales are done in the market, it grant goods and services for the consumers and income for the capitalists. If the expenditure amount is quite high, like over the average wage, this shouldn't be a problem, at least not from this side. 852
Otherwise, if this amount is too low, this will lower the aggregate demand eventually reaching a deflationary crisis; unsold goods and services lead to low salaries and dismissals for workers and bankruptcy for companies. So the entire productive system will slow down, it will be like economic self-harm. With this in mind, I can’t imagine a good reason for all countries to adopt such a limiting rule, and if only one country abandoned it, it will probably gain economic power from that so that the other countries will need to abolish this rule as well, or they will be economically outclassed.
So if the only way of make it possible is to have a communist-like form of state, that means all the countries of the world needs to be ruled by this communism-like ideology or to be under the influence of a much stronger country which is under this ideology. That’s already quite far from what we have in the real world.
I also assume that the government should make the overnight rate (which affect rates of loans) stay really low or completely at 0% (that can be achieved without the needs of nationalizing the bank system, as we can see in a lot of examples in Japan or Europe), otherwise the bank system could have too much power from the needs for everyone to make loans for acquiring expensive goods like an house; otherwise there should be some exceptions to the expenditure limit rule. I guess also that the more expensive services (healthcare and education) should be completely public and accessible for everyone. In addition, eventually other services which can be easily monopolized like water, gas, telecommunication, transport etc should also be nationalized.. 852