4 ms·

Why not a balanced-budget amendment for Washington?

2 points by hhs 4y ago

SOTGO 4y ago
I think the closest there is to a consensus among economists is that deficit spending is beneficial at least some of the time, especially during recessionary periods. An amendment that didn't allow any deficit spending would severely limit the ability of the government to respond to an economic downturn, especially if that downturn corresponds with a decrease in tax revenue. However, there may be room to put limits on spending over time, maybe limiting borrowing to some percentage of taxes collected, or limiting the number of consecutive budgets with deficit spending, etc. It's not clear to me, however, that such a restriction would be beneficial, and it's easy to see scenarios where a no exceptions amendment could lead to disaster, like an extended military conflict that necessitated large deficits to fund.
- amalgamated_inc 4y ago
  > consensus among economists is that deficit spending is beneficial at least some of the time, especially during recessionary periods hahahahahaha sorry so cute you think they will give up this power to benefit themselves and their cronies after the recession is over? :D The reason this doesn't exist is because they're corrupt, obviously. If you argue with economics, you've already lost against people who have no interest in learning the truth.
bediger4000 4y ago
Because the USA is not a household or a business, and in fact issues the currency? I'm not an economist, much less an econometricist, but I see that every day more rocks, trees, water and soil are turned into buildings, vehicles, works of art, infrastructure, etc etc. Very obviously we as a country need to adjust the amount of currency in circulation to account for the fact that there's more goods every day, above and beyond breakage, spoilage and destructive consumption. We want to adjust this amount up almost all the time, just so $1 in currency continues to buy the same amount of goods. If we have a constitutionally balanced budget, I don't think we as a country can adjust the amount of currency up. Such an amendment would cause deflation - money would be worth more. The incentive to invest or spend would disappear. No entrepreneurship would be necessary. Bad situation all around. This is a patently dumb idea.

2 points by hhs 4y ago

I think the closest there is to a consensus among economists is that deficit spending is beneficial at least some of the time, especially during recessionary periods. An amendment that didn't allow any deficit spending would severely limit the ability of the government to respond to an economic downturn, especially if that downturn corresponds with a decrease in tax revenue. However, there may be room to put limits on spending over time, maybe limiting borrowing to some percentage of taxes collected, or limiting the number of consecutive budgets with deficit spending, etc. It's not clear to me, however, that such a restriction would be beneficial, and it's easy to see scenarios where a no exceptions amendment could lead to disaster, like an extended military conflict that necessitated large deficits to fund.

amalgamated_inc 4y ago
> consensus among economists is that deficit spending is beneficial at least some of the time, especially during recessionary periods hahahahahaha sorry so cute you think they will give up this power to benefit themselves and their cronies after the recession is over? :D The reason this doesn't exist is because they're corrupt, obviously. If you argue with economics, you've already lost against people who have no interest in learning the truth.

bediger4000 4y ago

Because the USA is not a household or a business, and in fact issues the currency? I'm not an economist, much less an econometricist, but I see that every day more rocks, trees, water and soil are turned into buildings, vehicles, works of art, infrastructure, etc etc. Very obviously we as a country need to adjust the amount of currency in circulation to account for the fact that there's more goods every day, above and beyond breakage, spoilage and destructive consumption. We want to adjust this amount up almost all the time, just so $1 in currency continues to buy the same amount of goods. If we have a constitutionally balanced budget, I don't think we as a country can adjust the amount of currency up. Such an amendment would cause deflation - money would be worth more. The incentive to invest or spend would disappear. No entrepreneurship would be necessary. Bad situation all around. This is a patently dumb idea.