Republicans may use their vote on raising the debt ceiling as leverage in demanding longer-lasting fiscal health, through a balanced budget amendment, which would require revenues to match expenses.
“Government will always do the right thing, but first, it must exhaust all other possibilities. ~ Winston Churchill.
Feel free to leave a comment if you have an alternative to the choices offered.
Dan Braganca said:
You really think a balanced budget amendment is a good idea? Aside from it being horribly irresponsible and dangerous, what makes you think it won’t just cause the government to raise taxes to pay for spending?
--Rick said:
Yes, I do think a balanced budget amendment is a good idea; especially if tax hikes are tied to a super-majority (2/3rds) vote by both houses. I don’t find such an amendment to be any more dangerous or irresponsible than the actions by both President Bush and President Obama. Each has encouraged and allowed the Federal Reserve to print money that has us on the edge of hyperinflation. Each has served to bring about a reduced international bond/credit rating that threatens the dollar as the standard currency. Standard and Poor’s downgrade of the U.S. credit worthiness is potentially transformative, (is this what Obama meant?) along with our incomprehensible debt that has us recklessly owing more than 14 trillion dollars (and rising). Keynes is dead and the sooner we bury his policies and send them back to the noumenal world he created for his imaginary friends, the better. In answer to your last question, the government is us, and it is my view that the majority of us are fed up with irresponsible spending, waste, fraud and taxpayer abuses that burden those who produce and create in order to support those who do not. A BBA is a good step, but it is only one step of many that need to be taken.
Dan Braganca said:
I’ll ignore the laughable idea that we’re on the edge of “hyperinflation.” How many years are you guys going to predict this before it happens? Anyway, onto the BBA:
How would this work in practice? CBO projections? Conservatives love to say they’re always wrong when it’s convenient to their argument – Obamacare reduces the deficit so I suppose you think that would be ok. If there is a recession and revenues drop suddenly, you really think that’s the best time to instantly cut everything? If we were to “balance” the budget for this past fiscal year we would have had to eliminate ALL discretionary spending (including defense). No money left to go after Bin Laden. Aww shucks. Then we’d still have to raise taxes or do you think we can just immediately cut hundreds of billions in entitlement programs that people depend on without giving them anytime or way to prepare? What if there is a war? Seems likely considering we basically in perpetual war. Congress only has the ability to affect about 35% of the budget in the short term.
What happens if Congress breaks this amendment? We already have a debt limit (another stupid idea), do we just default on all our obligations? It’s almost as if you liked the sound of this but didn’t think through any of the practical consequences. Public policy shouldn’t be decided by blind faith and emotion.
--Rick said:
Have a good laugh, but I wouldn’t laugh too loudly if you have investments that ride on the back of the dollar; especially if the government allows quantitative easing (QE) to continue. I’m not sure if you remember a link I once provided you that had economist Peter Schiff facing down a plethora of so-called experts over the collapse of the housing market. He’d been predicting its demise since late 1999 to early 2000, but no one listened. In fact, by reviewing the video link, you will see that most people found his position “laughable”. Sometimes, it just takes a while for someone to pull the curtain for people to see the man/controller behind it. Here is another link to another Peter Schiff interview on gold/silver and the dollar. This time, no one is laughing on camera. In fact, all are in agreement. If only one could get these talking head to stop interrupting answers, the average American might be able maintain concentration long enough to grasp some of the concepts behind the talk – but, then, we’d be talking about a media with actual value to some outside of their sponsors and patrons.
If, conceptually, we can’t agree on a particular school of economics, arguing fine points with disparate views on reality (objective/rational vs mystic/noumenal) is like peeing into the wind – not very helpful and almost always causative of an undesirable blow back. If you haven’t read my recent “battle rap” post and viewed the accompanying videos, perhaps they will clarify my preceding sentence.
Quantitative easing was tried during the great depression (as well as at other times), and resulted in multiple nations devaluing their currencies with harmful results – in the United States, we went off of the gold standard and printed money almost non-stop. For a read in a non-economics narrative, I would suggest to those who stumble upon this comment to read, “The Forgotten Man” by Amity Schlaes. This is the book that inspired me to blog on government policies and issues that hit hardest those who get up in the morning for work, who pay their taxes without complaint, who want, simply, to be left alone, and who in the end, carry the burdens imposed by both the rich and the poor, and whose property is regularly met with confiscatory taxes intended for redistribution to the poor and subsidies to the wealthy or to favored program funding.
Dan Braganca said:
I knew I should have actually ignored your remark about inflation as it isn’t what I wanted to talk about. Didn’t we talk past each other before on this issue? I’m happy to get back into the discussion as every day that passes by continues to expose the absurdity of that view. If readers or you care here are some of my past thoughts on inflation.
I’m actually curious if you’ve considered any of my criticisms of the BBA, which I believe would be one of the most irresponsible and unworkable constitutional amendments considered recently.