Constitutional amendment for a balanced budget? (1 Viewer)

[blazerboy30]

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?

 

[julius]

a spending limit would be an idiotic thing to do. Sometimes you have to spend more.

Again, they're not being serious about this. they're just coming up with slogan type answers.

 

[SlyPokerDog]

I would be against that. Things happen, disasters, terrorism, wars, etc as to why budgets can't always be balanced.


IMO if you really want to control government and government spending we need a national initiative. We need ballot measures on a federal level. It would eliminate the majority of pork, backroom deals and the influence of lobbyists.

We wouldn't have had ObamaCare in its current forum with a national initiative. How many pages was that bill? Could you imagine sending a 20,000 page pamphlet to every voter in the USA and then except them to read it and vote yes?

We the people need to control government, not depending on the politicians to do it for us. And besides, just because a budget is balanced doesn't mean the money is being allocated correctly.

 

[STOMP]

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.

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?

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

maybe

What are the downsides to an amendment for balanced budgets?

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

 

[blazerboy30]

a spending limit would be an idiotic thing to do.

Excellent analysis and insight.

Sometimes you have to spend more.

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

 

[blazerboy30]

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?

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.

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

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.

 

[julius]

Excellent analysis and insight.

I leave that for people who feel the need to type a lot more than I do.

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

we're invaded by another country. we're at war with 2 countries. we don't have a tax structure that makes sense. Thats when.

 

[barfo]

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.

That doesn't have any basis in reality though. A constitutional amendment, any amendment, will take, quite literally, years. This crisis will be over in a couple of weeks. There is no way that you can possibly use this crisis to get that amendment passed. It's a "hey, look over there" ploy.

barfo

 

[blazerboy30]

That doesn't have any basis in reality though. A constitutional amendment, any amendment, will take, quite literally, years. This crisis will be over in a couple of weeks. There is no way that you can possibly use this crisis to get that amendment passed. It's a "hey, look over there" ploy.

barfo

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

 

[blazerboy30]

I leave that for people who feel the need to type a lot more than I do.



we're invaded by another country. we're at war with 2 countries. we don't have a tax structure that makes sense. Thats when.

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.

 

[MrJayremmie]

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

 

[BLAZER PROPHET]

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.

 

[blazerboy30]

A balanced budget is not realistic.

When the economy is down the government has to spend more due to obligations and support the economy.

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.

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.

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.

 

[Draco]

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.

 

[mobes23]

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.

 

[Draco]

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!

 

[blazerboy30]

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.

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.

 

[Minstrel]

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.

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.

 

[Denny Crane]

It is reasonable at times for the govt. to borrow, but that doesn't preclude a balanced budget requirement. For example, consider the govt. balancing it's budget and living by it. The need to build a bridge arises, so they issue bonds to pay for it, and either find room in the balanced budget to make the payments, or charge a toll and use that money to make the payments. When the debt us paid off, no need for the toll anymore, or the payments no longer come from the balanced budget.

The problem now is that govt. is borrowing to fund it's operational spending, and borrowing funds to pay off old debts, and neither is fiscally sound.

 

[blazerboy30]

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.

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.

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.

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.

 

[BLAZER PROPHET]

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.

Let me put it a different way.

The government has a budget. When economic times are bad, it has to operate in a deficit due to obligations and also it will spend money to get the economy back on track. When the economy is good, we bring in more than the budget (or should be doing so). At that time, in theory, we are to pay off any debt from the poor economic times and save for the next downturn in the economy. Then, in the event of a war... we borrow and set up a means to pay that off. Now that's the theory. If we have a "balanced budget" amendment it forces the government to abandon that method of operation and I don;t think it's a good idea.

 

[Minstrel]

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.

The first problem I have with it, is that it's deceptive. If you (or the Republicans in government) want to fight for lower tax rates, that's fine. But it should be fought for under those terms, not dressed up as a "balanced budget amendment" which doesn't immediately imply tax rate reductions.

As for reductions in tax rates in general, I think those should be on the table. But I don't believe the default should be tax reduction. I realize that will be a fundamental philosophical disagreement with you. I don't necessarily believe tax increases should be the default either; I think each should be fought for on a case-by-case basis. My feeling is that your conception of a balanced budget amendment essentially boils down to "tax reduction as the default."

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.

No, you're misunderstanding me. I'm saying that by borrowing against the debt in lean years and paying down the debt in boom years, it effectively saves in boom years to help in lean years.

I don't think literally saving cash in boom years is politically feasible. I think the debt functions as a way to let boom years help mitigate lean years.

 

[Denny Crane]

Exactly what is the govt. supposed to do with any surpluses? After it has completely paid down it's debt, it can spend it or refund it. There's no bank it can save the money, and certainly no mythical lock box. Even if it could put the money in a bank, it's absurd to take any excess from the economy and hoard it.

The problem with spending it, in good times, is the old axiom. Nothing lives forever but a govt. program. And those programs might be a nice luxury when we can afford them, but they're an incredible burden when we can't.

So those who've never met a govt. program they didn't like want to endlessly raise taxes. There truly is no end in sight.

 

[SlyPokerDog]

I would be against that. Things happen, disasters, terrorism, wars, etc as to why budgets can't always be balanced.


IMO if you really want to control government and government spending we need a national initiative. We need ballot measures on a federal level. It would eliminate the majority of pork, backroom deals and the influence of lobbyists.

We wouldn't have had ObamaCare in its current forum with a national initiative. How many pages was that bill? Could you imagine sending a 20,000 page pamphlet to every voter in the USA and then except them to read it and vote yes?

We the people need to control government, not depending on the politicians to do it for us. And besides, just because a budget is balanced doesn't mean the money is being allocated correctly.

Here is one groups idea -

What is the National Initiative for Democracy?

The National Initiative for Democracy (NI4D) is a meta-legislative proposal that would allow citizens, independently of Congress and the Executive, to propose and vote on laws. NI4D consists of a Constitutional amendment and a federal law.
The Democracy Amendment, a proposed amendment to the Constitution of the United States of America, will:

1. recognize the legislative power of the people to make laws
2. permit the people to amend a constitution by holding two successive elections, more than six months but less than one year apart
3. create the Electoral Trust to administer the procedures established by the Democracy Amendment and Act,
4. outlaw the use of funds from non-natural persons (for example corporate funds) in initiative elections under this article, and
5. outlaw non-natural persons (for example corporations) from sponsoring initiatives under this article.

The Democracy Act, a proposed federal law, will:

1. set out deliberative procedures to be used by citizens to create laws by initiative,
2. describe the key responsibilities of the Electoral Trust which shall administer the initiative process on behalf of the people, and
3. appropriate funds for the Electoral Trust from the United States Treasury

The National Initiative does not change or eliminate Congress, the President, or the judicial system. Laws created by initiative must still stand up in the courts just like laws created by Congress. The National Initiative adds an additional check –– the People –– to our system of checks and balances, while setting up a working partnership between the People and their elected representatives.
The full text of the proposed Amendment and Act are available here:

• The Amendment (562 words, 7 paragraphs
• The Act (3132 words, 59 paragraphs)

http://ni4d.us/en/national_initiative

 

[Minstrel]

Exactly what is the govt. supposed to do with any surpluses? After it has completely paid down it's debt

The idea is not to ever completely pay down the debt, but rather to use it lieu of hoarding money. You borrow in tough times and pay it down (but don't completely expunge it) in times of plenty. In that way, the government can effectively finance its needs in tough times with the benefits from good times.

I don't think anyone has suggested the government putting money in the bank.

 

[Denny Crane]

The idea is not to ever completely pay down the debt, but rather to use it lieu of hoarding money. You borrow in tough times and pay it down (but don't completely expunge it) in times of plenty. In that way, the government can effectively finance its needs in tough times with the benefits from good times.

I don't think anyone has suggested the government putting money in the bank.

The govt. effectively paid down all it's debt that it could by 2001. After that, it was taking in $200B more than it spent. Exactly what do you think they could have done with that $200B every year through 2010?

 

[blazerboy30]

The first problem I have with it, is that it's deceptive. If you (or the Republicans in government) want to fight for lower tax rates, that's fine. But it should be fought for under those terms, not dressed up as a "balanced budget amendment" which doesn't immediately imply tax rate reductions.

As for reductions in tax rates in general, I think those should be on the table. But I don't believe the default should be tax reduction. I realize that will be a fundamental philosophical disagreement with you. I don't necessarily believe tax increases should be the default either; I think each should be fought for on a case-by-case basis. My feeling is that your conception of a balanced budget amendment essentially boils down to "tax reduction as the default."



No, you're misunderstanding me. I'm saying that by borrowing against the debt in lean years and paying down the debt in boom years, it effectively saves in boom years to help in lean years.

I don't think literally saving cash in boom years is politically feasible. I think the debt functions as a way to let boom years help mitigate lean years.

What you consider "lowering tax rates by default", I believe would actually turn into "raising spending by default". I don't actually believe the government would run a surplus and then pass that on to the tax payers. It would get spent, just like it always has in the past.

 

[Minstrel]

The govt. effectively paid down all it's debt that it could by 2001.

What are you referring to by "all that it could?" The national debt wasn't $0 in 2001. In fact, it was still a large percentage of GDP.

 

[Denny Crane]

What are you referring to by "all that it could?" The national debt wasn't $0 in 2001. In fact, it was still a large percentage of GDP.

The Social Security Trust Fund is required by law to invest any surpluses it runs in T-Bills. The govt. paid down every other T-Bill but those, and couldn't pay off those.

 

[Draco]

What are you referring to by "all that it could?" The national debt wasn't $0 in 2001. In fact, it was still a large percentage of GDP.

But some projections had it reaching $0 in the far distant future, because of the enormous projected years of budget surplus', so we urgently had to spend and refund the surplus. Well the surplus projections never came close to actually happening, but it's good we made sure to pre-emtively get rid of any surplus just in case.