All current politics aside, do you think we should add an amendment to the constitution that requires all proposed budgets to demonstrate that they can be paid for? One of the challenges is that the GDP changes, and no one can predict how much money will be available later for funding programs that run more than a year. How do you account for that and protect social programs that need years to provide benefits? On the other hand, from a year to year standpoint it does seem pretty reasonable to require the government to be required to balance the budget. Thoughts?
Considering how much of the Constitution is routinely ignored in Washington, and how poor a job the Supreme Court has done defending it, I can only imagine how little good it would do once bad case law and various loopholes were done with it.
No. Deficit spending (when used with DISCIPLINE) is a valuable tool to help economies break out of financial recessions. The key point is that when times get better we need to work at paying down the debt incurred during deficit spending. The reason why that is not widely practiced is two-fold: 1) We have large amounts of very cheap credit available from foreign countries. 1) Paying down the debt does not create immediately noticeable (and politically valuable ) benefits, like spending does. If a congressman has a choice between a) using X billion in borrowed money to fund some Defense or public works project in his district, or b) refusing to fund the project in order to prevent a deficit, he will probably pick a. Even if the long term benefits might be greater by picking b, with option a he can point to that project as evidence to his constituents that he is helping to create jobs.
No, because even with the lack of financial discipline shown by our last 2 administrations, I would rather have that than a situation where we are in a recession and our best economic policy tool to pull us out has been taken away from us. I can absolutely see that situation turning a recession into a true depression.
Some might argue that spending your way out of a major recession doesn't seem to work, for example, this one.. however it does seem that spending your way out of minor rescission can work.. al la 1992... but then you never really know if it is spending that got you out since it doesn't when work scaled up... What about a budget balanced within some boundaries?
This is not a good idea. It would be like telling a large company that they are not allowed to take out a loan. There are times that taking out a loan is a requirement to keep the company vibrant. There is a problem with deficient spending but this would not be the solution. The solution is to do what was done during the Clinton adminstration. That is when the economy is doing well, you pay back the loans.
Banks tell large companies they can't take out loans all the time based upon presented collateral and risk assessment. I do agree that Clinton did a great job of using the good economy to pay off debt. I think the argument comes down to degrees. Balancing the budget might not mean no deficit spending, that's an assumption. It might mean that the level of deficit spending must be within some measurement of possibility that the economy can grow to cover the spending in later years. What ever that might mean.
...but then the time will come that people realize that gold and silver are nothing but shiny metals that aren't really worth anything. What of the clan who, many a millenia ago, collected an eternity's supply of common seashells when they had perceived monetary value? :dunce:
Maybe, but that time hasn't come yet, and people have valued those metals for six thousand years. Meanwhile in the last century the U.S. dollar has lost 95% of it's value. I'm pretty satisfied that precious metals are the better long term bet. -=Steve=-
It's more like making the repeated drunk driver pass a sobreity test before he can get behind the wheel.... -=Steve=-
Balanced budgets are for sissies. The US should just open up a new credit card with one of those "0% APR's for the first 216.7 months" promos, transfer the 14 trillion, and voila! Paid off in no time! And now I can get my own show on CNBC. -Matt
I think this is a good question. You would hope that congress and the president would simply follow the laws, however that is probably sadly unrealistic. Another even deeper questions is how would violations be litigated.
Actually the federal budget is balanced, as are many (if not all) of the states budgets - borrowed money is part of the balancing. So presumably any proposed constitutional amendment must prohibit borrowing to make it different from the current practice..
Since no one has seen the amendment who know. However I am not sure that borrowing constitutes balancing. I think you thinking of the concept of leverage. The current model of simply spending as much as you can and announcing that any deficit will be solved later by magic doesn't exactly feel right...
