Balanced budget amendment

mikepegg44

Just sort of wondering what you guys think of this...
http://dailycaller.com/2010/01/11/balan ... just-that/

personally I believe it is a great thing. It will force the pay as you go type of policies that make good fiscal sense. It will also help us get a handle on the rampant waste in government contracts that have plagued the budget year in and year out for as far back as I can remember.
interesting to say the least.


edit* before it becomes an argument about who created the deficits, let's just talk about the amendment and not the politics of the past 100 years.

FiveB247x

I think in theory it's a great idea - but in practice it is very tough. Our nation faces so many daunting tasks which are all so out of whack, and the reality is no one wants to give an inch to get shit in order. We've become a spend happy, consumption junkie who just keeps letting the issues and bills pile up. We don't address them and the world can't as of yet force us too. Just have a read of this wonderfully written and documented article (http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/). If we were someone else (another nation), we'd be undergoing massive forced changes - but since we have so much money and power, it is not done. One day the piper will come calling if we don't address it first.

OutOfBreath

A worthy long-term goal. However sticking to it rigorously may do more harm than good, I think, in that it can hamper necessary public investments in infrastructure, for instance.

The governor in questiondoes not adress the issue apart from him not liking health care spending. He'll exempt the military and "public safety" from this. In other words, you may balance the other costs, and then just blow every budget with military spending if you want. (Sounds like a republican, doesn't it ) If there were to be a point to it, it had to apply to the entire budget all the time, otherwise, you'd be surprised what could be considered "public safety" for instance.

The principle is a no-brainer: Don't use more money than you have or can obtain within a reasonable time-frame. I might mantion one thing the changing Norwegian governments actually do a very good job of. Norway have buttloads of oil-money from our offshore rigs. The oil company is state-owned for the most part, generating massive income for the state. However, should all of this be poured into the economy right now, the economy would soon tank, and prices go through the roof. So the money goes into a large pension fund, and a certain amount taken into the budget each year. That amount is not to exceed 4% of the expected normal profit over time. And while that 4% have been stretched at times (certainly the last 2 years), overall there is discipline to not exceeding it too much. All the parties save one (our populist right wingers) accept that principle, and is guided by it. Exceeding it quickly becomes a political issue with all the other parties crying foul.

The point is, you dont need to have unflexible rules about always adding up every year, you can go a far way about establishing principles that are loyally followed by all major parties. Establish that breaking it is irresponsible behaviour. But you must allow for huge public investments that cause deficits now, but will generate added value in the future when it is complete and working. (As serious health care reform in the US certainly would)

I dunno, in my country we at least have the tradition of thinking macro-economical and socioeconomically about budget costs. How some costs cancel out later (bigger) costs and so forth. I don't see so much of that in the public debate in the US. I am certain it goes on inside the various government levels, but it is not the stuff of public debate it seems...

Peace
Dan

mikepegg44

OutOfBreath wrote:

A worthy long-term goal. However sticking to it rigorously may do more harm than good, I think, in that it can hamper necessary public investments in infrastructure, for instance.

The governor in questiondoes not adress the issue apart from him not liking health care spending. He'll exempt the military and "public safety" from this. In other words, you may balance the other costs, and then just blow every budget with military spending if you want. (Sounds like a republican, doesn't it ) If there were to be a point to it, it had to apply to the entire budget all the time, otherwise, you'd be surprised what could be considered "public safety" for instance.

The principle is a no-brainer: Don't use more money than you have or can obtain within a reasonable time-frame. I might mantion one thing the changing Norwegian governments actually do a very good job of. Norway have buttloads of oil-money from our offshore rigs. The oil company is state-owned for the most part, generating massive income for the state. However, should all of this be poured into the economy right now, the economy would soon tank, and prices go through the roof. So the money goes into a large pension fund, and a certain amount taken into the budget each year. That amount is not to exceed 4% of the expected normal profit over time. And while that 4% have been stretched at times (certainly the last 2 years), overall there is discipline to not exceeding it too much. All the parties save one (our populist right wingers) accept that principle, and is guided by it. Exceeding it quickly becomes a political issue with all the other parties crying foul.

The point is, you dont need to have unflexible rules about always adding up every year, you can go a far way about establishing principles that are loyally followed by all major parties. Establish that breaking it is irresponsible behaviour. But you must allow for huge public investments that cause deficits now, but will generate added value in the future when it is complete and working. (As serious health care reform in the US certainly would)

I dunno, in my country we at least have the tradition of thinking macro-economical and socioeconomically about budget costs. How some costs cancel out later (bigger) costs and so forth. I don't see so much of that in the public debate in the US. I am certain it goes on inside the various government levels, but it is not the stuff of public debate it seems...

Peace
Dan

right on, Pawlenty's version would be a bastardized version, but it in principle is a great idea. I don't like the idea of making exceptions, I just feel like you can balance the budget, spend what you take in, and not have to add for things like defense and public safety. I hate the idea that the current administration would be able to pick and choose what should be exempt and what shouldn't. If people want healthcare for the country, I think the government should have to balance the budget out and make cuts in other places. I see no harm in that at all. The idea they can spend more than they take in is crazy. I cannot just go to my boss and say hey, I feel like spending 80,000 this year, so instead of the normal amount you pay me, I am gonna need more.

OutOfBreath

mikepegg44 wrote:

right on, Pawlenty's version would be a bastardized version, but it in principle is a great idea. I don't like the idea of making exceptions, I just feel like you can balance the budget, spend what you take in, and not have to add for things like defense and public safety. I hate the idea that the current administration would be able to pick and choose what should be exempt and what shouldn't. If people want healthcare for the country, I think the government should have to balance the budget out and make cuts in other places. I see no harm in that at all. The idea they can spend more than they take in is crazy. I cannot just go to my boss and say hey, I feel like spending 80,000 this year, so instead of the normal amount you pay me, I am gonna need more.

Well how about balanced budget, but investments are kept on a different sheet. And the criteria for counting as investment must be that it will in the long term reduce costs, or yield increased revenue that cover the cost. (this shouldn't all be off-budget of course, but be the exceptions tolerated for a deficit)

As for redistributing costs, they can also raise taxes, you know.
Point is, don't use more money than you have, or at least not so much that you can't make your downpayments regularly. Wanna spend more, well you need to tax more or find some other source of income.

Peace
Dan

blackredyellow

Yeah, the subjective exemptions are going to prevent this type of amendment from doing any good.

If a country needs to fight a war and needs large funding, then cut back in other areas (remember the whole sacrifice thing?), same with healthcare... if you want to make it a nationally funded thing, then spending has to be cut elsewhere.

Like OutOfBreath said, you still need flexibility for large expenditures, like a lot of business do with "capital improvements". Even healthcare or military funding (like responding to an attack) can fall into this, but there needs to be set guidelines on how long we can carry that debt and when/how it will be repaid.


There are just so many consequences to cutting spending on current programs... living in NY, we have been seeing it for the last few years. I live in Albany, so a lot of people I know either work for the state or some sort of state contracted company. When funding gets cut to state agencies we save money, but then people lose jobs and fall back on unemployment and other programs (which costs us money), and it decreases tax revenue (income tax, sales tax, etc). It trickles down to gov't contracted companies not investing/hiring anymore (or as much) and so on and so on... Same thing happens federally when we cut military spending.

We can all agree that the government needs to spend less, but none of us can probably agree on what gets cut.

mikepegg44

OutOfBreath wrote:

mikepegg44 wrote:

right on, Pawlenty's version would be a bastardized version, but it in principle is a great idea. I don't like the idea of making exceptions, I just feel like you can balance the budget, spend what you take in, and not have to add for things like defense and public safety. I hate the idea that the current administration would be able to pick and choose what should be exempt and what shouldn't. If people want healthcare for the country, I think the government should have to balance the budget out and make cuts in other places. I see no harm in that at all. The idea they can spend more than they take in is crazy. I cannot just go to my boss and say hey, I feel like spending 80,000 this year, so instead of the normal amount you pay me, I am gonna need more.

Well how about balanced budget, but investments are kept on a different sheet. And the criteria for counting as investment must be that it will in the long term reduce costs, or yield increased revenue that cover the cost. (this shouldn't all be off-budget of course, but be the exceptions tolerated for a deficit)

As for redistributing costs, they can also raise taxes, you know.
Point is, don't use more money than you have, or at least not so much that you can't make your downpayments regularly. Wanna spend more, well you need to tax more or find some other source of income.

Peace
Dan

right on, I will say, at least then they would have to be honest about what they were going to do. If you want more income tell us how you are going to get it, if you are going to raise taxes on the rich, say it, if you are going to do a VAT then say it, I think we may, and that is a big may, get more honesty in budget talk from politicians if they have to clear the bottom line by law

mikepegg44

blackredyellow wrote:

Yeah, the subjective exemptions are going to prevent this type of amendment from doing any good.

If a country needs to fight a war and needs large funding, then cut back in other areas (remember the whole sacrifice thing?), same with healthcare... if you want to make it a nationally funded thing, then spending has to be cut elsewhere.

Like OutOfBreath said, you still need flexibility for large expenditures, like a lot of business do with "capital improvements". Even healthcare or military funding (like responding to an attack) can fall into this, but there needs to be set guidelines on how long we can carry that debt and when/how it will be repaid.


There are just so many consequences to cutting spending on current programs... living in NY, we have been seeing it for the last few years. I live in Albany, so a lot of people I know either work for the state or some sort of state contracted company. When funding gets cut to state agencies we save money, but then people lose jobs and fall back on unemployment and other programs (which costs us money), and it decreases tax revenue (income tax, sales tax, etc). It trickles down to gov't contracted companies not investing/hiring anymore (or as much) and so on and so on... Same thing happens federally when we cut military spending.

We can all agree that the government needs to spend less, but none of us can probably agree on what gets cut.

well said