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House to Consider Balanced-Budget Amendment

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BDBoop

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House to consider balanced-budget amendment | Reuters

(Reuters) - The House of Representatives will vote on a bill that would amend the Constitution to require Congress to balance the budget each year, Republican Leader Eric Cantor said on Thursday.

The measure has little chance of becoming law, but it could give Republicans added leverage as they struggle with Democrats over a budget-cutting deal that would allow the country to continue borrowing money and avert a default on its debt.

Cantor walked away from the talks earlier in the day, saying negotiators were at an impasse over tax increases sought by Democrats.

The Treasury Department has warned that it could run out of money to pay the country's bills if Congress does not increase the $14.3 trillion debt ceiling by August 2. That could push the country back into recession and rattle markets across the globe.
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This would be a great thing for all of us.

There needs to be one exception, for in time of war but only a war declared by Congress.
 
Not all debt is bad debt. Consider my shed. I was paying $75 a month in storage fees. So I put $1,000 on a credit card and built a shed using blueprints my friend drew up. I paid off the credit card in a few months, and the shed has now paid for itself in accumulated savings. In the long run, short-term debt allowed me to improve my long-term cash flow.

Obviously, that example wouldn't apply to government, but it illustrates the principle well enough. A balanced budget amendment is needlessly restrictive. Debt in itself is not the problem, but rather how the debt is used.
 
GhostlyJoe said:
Not all debt is bad debt. Consider my shed. I was paying $75 a month in storage fees. So I put $1,000 on a credit card and built a shed using blueprints my friend drew up. I paid off the credit card in a few months, and the shed has now paid for itself in accumulated savings. In the long run, short-term debt allowed me to improve my long-term cash flow.

Obviously, that example wouldn't apply to government, but it illustrates the principle well enough. A balanced budget amendment is needlessly restrictive. Debt in itself is not the problem, but rather how the debt is used.
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Personal debt is not as bad as public debt because those who get into public debt have no concerns because it's not their money, so who cares how much piles up.
 
While it sounds good in theory I can see it having the potential to turn out very badly.


It will need an emergency clause allowing the government to go into debt in some circumstances. I feel they may leave this so broad that in the years to come they will cover many non emergencies in this clause just to balance the budget.

Secondly they will need to have a check to ensure that they cannot simply jack taxes up on the wealthy to cover expenditures. What we are 2 trillion over this year? We will just have to raise taxes on the wealthy another 10%! and the same the following year and the year after.... until we have completely crippled the american economy but hey! the budget is balanced!
 
Councilman said:
Personal debt is not as bad as public debt because those who get into public debt have no concerns because it's not their money, so who cares how much piles up.
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If there were no concern for public debt, there would be no effort to pass an amendment. We have historical examples of wise public investmen, and while I can applaud the intentions of a BBA, it could be crippling at times and creates perverse incentives to boost taxation.
 
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