So, perhaps a law to ban any encryption would save us a lot of money. Better yet, force everyone to make every information public.

But most likely, all this data would be of great interest for criminals? What about the cost of fraud, crime, identity theft? Is it better to have unencrypted phones stolen by criminals in exchange for easier and cheaper surveillance?

I'd think Apples encryption isn't mostly targeted to stop law enforcement and surveillance but more to stop misuse of lost and stolen phones. In addition, if able to implant zero-day exploits, any attacker can bypath any encryption - or he might just target the transmission or the other side of a sent/received secret. Most information isn't produced on an iPhone to sit there forever: either it is received from a server / second device or it is intended to be transmitted to a receiver. So, an encrypted phone isn't really stopping surveillance.

Those intelligence budgets aren't going to get smaller, almost no matter what. The general US population has no idea how much is spent, their best guess would be: a lot (and it'd be a correct one); so there can't hardly even be a voter push-back based on expenditures.

As such, the best option is to make it so expensive to carry out mass surveillance, their only choice is to be selective about who they target and to focus on specific individuals rather than a billion people in general.

The cost should be drastically increased in all regards: time, electricity, water, monetary, etc.

It's very likely this will happen. The NSA was sitting at the ultimate sweet-spot in history, but windows like that are only open for extremely brief amounts of time. It will close and there is nothing that the NSA can do to stop it.

Increasing the cost of surveillance means it becomes easier to constrain the intelligence agencies by simply not allowing them endless budgets.

I think you misunderstood the term "cost" as used here.

Insofar as analyst hours, kwh, computing hardware, etc. can all be converted to dollars, spacefight and I are talking about comparable units.

And the idea of reducing the cost for intelligence agencies to surveil us to save money is an interesting one. While I agree that paying more taxes for a dubiously useful "service" is bad, I disagree that the right response is to reduce that marginal cost--i.e. be more transparent in the face of government surveillance. Under a regime of high marginal costs, I'd like to believe that the NSA would simply be more selective in its targets, rather than be successful in securing additional funding.

Not to mention, the larger the black budget, the harder it is to hide, and the more outrage when something like Snowden happens.

Not sure, no. Why?

I think cost can be looked at in terms of money, time, risk, effort, or any number of other things and this is what is being referred to above. That point is probably moot though, as all will translate to additional financial costs as you mention.