Constitutional amendment for a balanced budget?

With some members of the GOP pushing for a Constitutional amendment for a balanced budget if the debt ceiling is raised, it brings up some interesting questions.

Many non-GOP members in this forum have wondered by the non-democrats weren't voicing concern when we were overspending before Obama took office. A constitutional amendment is the GOP putting their money where the mouth is and really getting serious about getting spending under control.

Would you be in favor of a constitutional amendment for balanced budgets?

What are the downsides to an amendment for balanced budgets?

 

while it may be the 2 hours of hoops I just finished blurring my reading ability, I think you made a typo in the bolded part. Could you please clear it up so this reader knows what you're asking/little help?

maybe

the most obvious downside I can see is the timing. It's the 11th hour to get something done with the debt ceiling but instead suddenly the Tea Party wants to talk about an amendment to the Constitution that will take many months to push through. I think the Cons are risking really pissing off a large portion of their base if they don't get it together and work with the President and Dems to accomplish the country's business. While this idea may have real value, payment is due and a deal needs to be struck... it's ridiculous that this is whats being pushed instead. It almost seems that they want the country to have a true crisis.

STOMP

 

Excellent analysis and insight.

Sometimes? "Sometimes" isn't the problem. What are some examples of "have to spend more"?

 

Sorry... that part wasn't really a question. It was just an observation because at first thought, I would likely support the amendment that would really limit government spending, regardless of which party is in power. And I'm one of those non-democrats that is complaining about Obama's spending.

I actually don't see that as a huge downside. Sometimes it takes a crisis to kick people's ass into gear, and we are in desperate need of getting serious about this debt and deficit issue. I like the fact that if the GOP could use this possible crisis to get the amendment, then it will have lasting effects on limiting spending, regardless of which party is in power. I think it would help with the finger pointing and excuse making and make both parties responsible for spending going forward.

 

Regardless of timeline, would you support it? Why or why not?

 

Your first example is valid. In which case it would make sense to give the President the power to raise the limit in a crisis.

Your last example of a bad tax structure is absolutely the worst reasoning possible.

 

Yes Please. Been for the Balanced Budget Amendment for a while now.

 

A balanced budget is not realistic.

When the economy is down the government has to spend more due to obligations and support the economy. When economic times are strong the government should be actually saving money due to the large influx of monies and using what it saves for the bad economic times. A balanced budget throws both those off.

 

That is why the budget is determined every year. It should be possible to have reasonable models of GDP and tax revenue for a year projection. There could easily be a part of the law that gives a 5-10% buffer.

The government should definitely not be taking in more than it is spending, unless it is to pay off the existing debt. If they are taking in more than spending, then our taxes should be lowered.

 

The government would be spending the money, but in the future, at a time when taxes would be more harmful then in a booming economy.

 

Honestly, I think it makes some sense -- a balanced budget should be the goal year in, year out. But there are a lot of surprises in life and there will almost assuredly be some years where it does not make sense and causes more problems than it solves.

I'm glad the conversation is happening, but I think it's probably going too far.

 

Requiring a balance budget may be an over-reaction. Tight fiscal protectionism led to the great depression, so it’s very plausible such an amendment would cause more problems then it fixes.

I question if the GOP is seriously trying to pass such an amendment, it's probably just political rhetoric.

Since our budget deficit is $1.2 trillion, why don’t we cut spending to $1.2 trillion and abolish all taxes? That would give the economy a kick start!

 

Right. And I don't want the government, which isn't a bank or an investment, holding my money for as long as they determine is the right amount of time. Is the government going to pay me interest on my money? A government doesn't exist for making money or saving money. It exists to protect peoples' basic rights.

 

I think more than an earnest desire for balanced budgets, this sounds more like a cynical tactic to ratchet taxes downwards over time. In years where spending ordinarily would have outpaced revenues, you're now capping spending to revenues. In years where revenues would ordinarily have outpaced spending, you say taxes should just be lowered. The result is that every year either spending exactly matches (or close to) revenues based on current tax rates or else current taxes rates are lowered.

My own cynical position is that I'd rather no balanced budget amendment because running deficits allows for the ability to "save" (that is, use the benefits of boom years to help in lean years) without literally hoarding money (as you say, the government isn't a bank). In years where spending outpaces revenues, the country runs a deficit and adds to the debt. In years where revenues outpace spending, the country runs a surplus and uses it to pay down some of the debt. It's similar to "saving money in boom years to be used in lean years" but without the "government is not a bank" rhetoric.

 

I think with a predetermined buffer on the budget numbers, your concern for "ratcheting down tax rates" isn't an issue. But even if you are right, what is wrong with ratcheting down tax rates? Assuming the balanced budget amendment, the spending reductions are matching the tax reductions. Now if a politician wants to promise great things to the public, they will be met with the reality that they have to be honest about tax increases to get those things done.

You want the government to both 1) save money during the boom years to be used in the lean years and 2) use the surplus to pay day the debt.

I'm ok with using tax revenue to pay down the debt. But letting the government hold tax payer money because they can't project their budgets very well is pretty ridiculous. Again, is the government going to pay me interest for holding my money for an indeterminate length of time? Additionally, if the surplus is used to pay down the debt, it has the added benefit of being a cost reduction by reducing interest payments, which would help during the lean years.