Several recent posts, especially here and here, have advocated for a BBA to the U.S. Constitution and pointed out that 27 states (out of a required 34) have now called for a Constitutional Convention to propose a BBA. I pay careful attention to the responses I receive to my posts. Several folks have said that while they support a balanced budget, there are other higher priorities for them, such as ending wasteful and inefficient programs or focusing more on the needs of people rather than being overly worried about budgetary matters.
I contend that a carefully formulated BBA would do far more than just solve our debt problem, as important as this is. For example:
- An essential component of a BBA would require the President to submit a balanced budget to Congress each year. So it starts out by forcing the Administration to set priorities. If a new program is advocated, fine, but then it has to be offset by cutting back on existing programs, or else raising taxes. Congress need not accept the President’s priorities but then it has to set its own.
- It would become a huge priority for both Congress and the President to carefully examine all programs to ferret out waste and inefficiency. There would be an incentive for programs to be shifted to the states, with the flexibility to make them more effective, in return for cost savings.
- The best way to raise stagnant wages for the middle class is to make the economy grow faster. The best way to grow the economy faster is broad-based tax reform, with lower tax rates across the board, paid for by closing loopholes and shrinking deductions. But faster economic growth will also bring in more tax revenue, therefore making it easier to shrink the deficit and balance the budget.
Conclusion: A Balanced Budget Amendment to the U.S. Constitution would have many benefits, beyond “mere” fiscal responsibility. Next question: how should a BBA be formulated to insure that it is both effective and flexible enough to allow response to emergencies?
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Politics is dirty business. Getting a balanced budget, although quite necessary for specific households for they have no choice, since they don’t make the paper money. I define politics as “getting someone else to do the dirty work”. The nitty-gritty of daily living has not been a priority for most politicians other than getting elected or finding a governmental office to move to when they lose an election. Or, I suppose something almost as good, that is turning to lobbying for a corporation.
Ultimately, I think the balanced budget is not much different than any other commitment, simply put, the U.S. government plans to pay back any party with whom they do business. Now, we are into world affairs. Perhaps in years to come, someone will bail us out despite the hard times imposed as we, the Western powers, have done recently to countries such as Greece.
I am still more worried about children going to bed hungry.
I am also concerned about children going to bed hungry. I will grant you that this is a more immediate need than long term fiscal planning. But printing money the way we have been doing in recent years will eventually lead to disaster. And we can’t assume that someone will be nice to us in the same way that we’ve been nice to Greece. When a severe fiscal crisis does catch up to us, there will be millions of people going to bed hungary. You and I may no longer be around but our children and grand children will be.
I surely agree that we may not be so lucky as Greece seems. Whenever I asked my Dad whether I should choose one way or another on major questions, he would say a bit crudely, “Jesus Christ! It is hard enough for me to figure out for myself. You will have to decide on your own.” A migrant worked for some 20 years, he had one economic practice, he always kept 6 one-hundred dollar bills in his billfold. It clearly was his escape money which he never used until he was too old to ‘run away’. He endured the depression of 1929 despite that he lost 7,000 in the Wisner Bank when it foreclosed. He had accumulated the savings over more than decade.
I still have great difficulty allowing the less fortunate of today to suffer for the fate of the future by trying to achieve a balanced budget without greater sacrifice on the part of the more fortunate.
Perhaps we need a review of exploring what should be capitalized and what socialized. Maybe Bernie and Hillary can find a united path. I see no hope from any of the Republican candidates at this point.
Under a balanced budget amendment there would be lots of tradeoffs to get it implemented. Spending would be cut for sure but that leaves a lot of choices. I doubt that poverty programs would be cut very much. It’s more likely that crony capitalism programs such as farm subsidies and tax loopholes for the wealthy be affected the most.
Over the past 35 years (since 1980) fiscal responsibility has fallen by the wayside. The U.S. is headed for disaster if we don’t turn this around.