The balanced budget amendment is something that comes up from time to time in the political debates but now is still a pipe dream. It simply is a call for fiscal responsibility. It means the government can not spend more in any given year then it takes in taxes. The only exception would be a time of war. You have to keep your household budget balanced and this is what the idea behind this is. To stop the government from spending without care. Every year spending must equal or be less than revenue.
Balanced budget based on the business cycle
An alternative to this idea of a yearly balanced fiscal plan is for the government to balance the budget on a four-year cycle to account for fluctuations in tax revenue connected with the business cycle. This way you do not need to micro-manage revenues vs. expenditures. I prefer the straight yearly plan and not the four-year plan.
You are out of your mind if you think this is not an important amendment to the US constitution. And you are very selfish. Debt is nothing than transferring payments to your children so you can have current consumption. That is pure selfishness.
History of how the US government was almost debt-free
- Thomas Jefferson early on wants to US citizens to tighten their belts and end the US debt early on from the Revolutionary war and make it part of the constitution.
- After the Civil war in 1866 with debt increasing the debate opened again.
- In 1936 when the US was starting to see some light after the great depression and the New Deal spending got out of control there was again an initiative to balance the budget
- Andrew Jackson was the only president to have no debt and a balanced budget.
- Clinton was forced into a budget surplus by the Republican Contract with America. Actually, we were 1 vote away from this amendment. The House of Representatives passed it and the senate it came down to one vote. Can you believe that?
- This was reversed under eight years of George Bush and in equal proportion to Bush in just one year under Obama the budget was out of control
- By 2013 the interest payments on the national debt will reach about 18% of the budget and the US could get downgraded from AAA which would mean it would pay more for debt.
- By 2030 the Government should collapse under debt as fixed payments exceed revenue. Our children will have to pay for today’s consumption bailouts.
- Nothing short of a balanced budget and pay down on the debt can fix it.
The current Obama plan will not work unless we have about 5% growth a year for several years. It will not happen. Some people argue that the percentage of debt compared to GNP or national income is not at historic highs and that we have been in worst situations. That is nonsense. After WWII we had the ability to grow our way out from the debt as the whole world was rebuilding and needed our production. Now we have a slow-growth economy because of globalization and a trade deficit.
No way can the USA get out of this one without a balanced budget act, otherwise, the national debt will destroy the country. This crisis (no real crisis) was just a money grab by special interests. Now our children will pay for it. If you think I am joking check out the national debt clock.
If you want to do something about keeping the government in control read more about the balanced budget amendment. This is a non-partisan plan, meaning neither Democrat or Republican, just American. It is championed by congressman Bob Goodlatte.
Let me know what you think about this and is it still a relevant issue in American politics.