Three Reasons Why a Federal Balanced Budget Amendment Is Conceptually Flawed
With every economic slowdown in recent history, calls for a balanced budget amendment to the U.S. Constitution reach a fever pitch. Many times, this sort of “common-sense” governance is presented with hokey populist rhetoric equating the budget of an average American family with that of our federal government. This can—at least to a naïve observer—be made into a compelling case, as there are endless soundbite-worthy ways to illustrate just how much more our federal government spends than what it takes in. You could scoff about the fact that the federal budget has only been balanced six times in the past 50 years. Throwing around dizzyingly large figures is also a popular strategy, such as the fact that the past budget alone added $1.3 trillion to the debt, bringing total U.S. debt to around $15 trillion. If you like your arguments for a balanced budget mixed with a touch of jingoism, perhaps you could fret about China holding about $1.1 trillion in U.S. debt (despite the fact that the Federal Reserve and other intra-governmental holdings dwarf that amount by about 6 times over). To be clear, we should be engaged in a sustained, determined effort to reduce U.S. debt. However, this can—and has—been done perfectly well under the current Constitution. Gimmicky strategies like balanced budget amendments may sound good on the campaign trail, but they are fundamentally flawed methods for...
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