Few if any competent economists endorse the idea of a mandatory balanced budget every year. That’s because budget deficits are a lot like alcohol. In moderation they are certainly pleasant, and quite possibly healthy. But we have a different situation today, because as for alcohol, the only treatment for a history of uncontrolled abuse is strict abstinence, and if you look at the borrow and spend Republicans you can understand why they feel the need to do something extreme about the budget. After our Post Reagan budget disaster, Clinton demanded that “Pay-Go” be adhered to with discipline. (Under Pay-Go, any spending increases or tax cuts have to be balanced by matching spending decreases or tax increases somewhere else in the budget.) This was a key to Clinton balancing the budget for his last 4 years in office. Bush never once balanced the budget and had to let Pay-Go die in 2002 in order to make his tax cuts for the rich work. Democrats can deficit spend properly and safely. Republicans have an unequivocal history of borrowing abuse, driven by a demonic need to cut taxes for the rich and to use our army to subsidize defense contractors and to hunt for oil abroad.
Abusers deny that they are doing “it”. If forced to confront it, they claim it is necessary, that they have to do it to survive. For the alcoholics the excuse might be a bad home life or job, for the Republicans the excuse is the need to have a military that is bigger than the rest of the world combined, a desire to destroy the social safety net, and a return to the Jim Crow style “States Rights”. Now they are pretending to try to stop the behavior that they can’t handle responsibly, by trying to make everyone else stop it, while leaving themselves a loop hole to carry on.
So now the extremists are sort of acknowledging that after the last budget busting binge of tax cuts for the super rich it is hopeless for them to stick to moderation, althought they still do not admit they were in the wrong. Senator Hatch has introduced what is nick-named the “Balanced Budget Amendment” to the Constitution. It has 47 Republican co-sponsors in the Senate. It is actually just a fig leaf for them to attack the social safety net, as it contains an exception for when,
“….the United States is engaged in military conflict which causes an imminent and serious military threat to national security….”
As if that will never happen…. It also requires 2/3 majorities in both houses for any tax increases, so that there can never be a correction to the excessive Reagan-Bush tax cuts for the rich. What it will do is limit the size of Government to 20% of the GDP, so that as our population ages the elders don’t get the Social Security checks that they have paying for all their lives.
A real balanced budget amendment might be a good idea given our history of abusing tax cuts for the rich, but with exceptions for increasing social services that automatically trigger higher taxes on the rich. It might force us to pay for our wars as we fight them, which would go far in making us think twice about the role of the military in our society. In the worst case, at least during the next election, Democrats can claim to have supported a “real” balanced budget amendment.