A Balanced Budget Amendment is a Horrible Idea – As Are Most Amendments

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July 20, 2011 by D Stack

In the current debate over the debt ceiling House Republicans have unveiled their proposal for a balanced budget amendment.

Essentially this amendment would:

  • Require a balanced budget
  • Make it difficult to raise taxes
  • Cap spending below recent averages

All three of these are, in my opinion, horrible things to write into the Constitution.

First, there is the issue of requiring a balanced budget? Who in their right mind would be against that? And on paper it sounds pretty good. The problem with that is in times of economic struggle there is a greater need for government spending while at the same time raising revenue is more difficult. People have been unemployed for months or years. Revenues are down. Teachers, police, fire fighters, etc. all have jobs in jeopardy. This is actually a very good time for the government to borrow money. Doing so helps keep workers at their jobs, keeps the unemployed afloat until the economy improves, and allows for stimulus spending if the free market does not provide for work. This was true in the Great Depression – which was ended by the greatest public spending project in US history, the Second World War.

The converse is during good economic times it makes sense for the government to keep its spending low, balance the budget, and pay off the debt. This is something we were doing quite well in the late nineties. I believe one of the worst mistakes we made as a nation were the Bush tax cuts. They were initially made because of the budget surplus. We then cut taxes while going on a spending spree – a spending spree during times which, while not superb economically, were far less dire than today.

The other two points of this amendment I call out, that of making it difficult to raise taxes and capping spending, are also poor ideas. Moreover, they are political statements and objectives. One of the strengths of our Constitution is it is adaptable – it doesn’t dedicate much text to what should be done but rather how it should be done. The Bill of Rights and other Amendments covers such details such as guaranteeing the rights of the people and cleaning up/clarifying how business is done. But the Constitution has stayed clear of what should be done. It doesn’t tell lawmakers how to spend money, it doesn’t set foreign policy, it doesn’t set tax rules. Rather it provides the framework for individual Congresses and Presidents to do so. This keeps it flexible.

Beyond the fact that policy-wise I believe those are horrible ideas, they are also political statements. The debates on the merits of a balanced budget vs. deficit spending, on how to tax, on how much to spend – these are all things which need to be settled politically and settled again and again. And this is how it should be. History has shown an amendment is not required to balance the budget. Rather a budget which brings in more revenue than it spends will do so.

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One thought on “A Balanced Budget Amendment is a Horrible Idea – As Are Most Amendments

  1. Loved this post! I was actually going to take on this topic but you beat me to it. I agree with you. It’s complete B.S. and although it may tug at the heartstrings of the public in the short run, in the long run it would be a disaster.

    “The problem with that is in times of economic struggle there is a greater need for government spending while at the same time raising revenue is more difficult.”

    Very true. I feel like these lawmakers have never taken an introductory economics class.

    Loved how you ended this with “History has shown an amendment is not required to balance the budget. Rather a budget which brings in more revenue than it spends will do so.”

    I’m not afraid about our country doing poorly in the long run, but I am worried about politics messing with our economic system that has produced results over the last 100 years.

    I look forward to reading more of your posts. I recently wrote a post about The Federal Debt Ceiling. I’d be interested to see if you agree with my views: http://thethoughthole.wordpress.com/2011/07/14/the-federal-debt-ceiling/

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