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It can be argued that the U.S. government has an excessive spending problem, where the politicians that American voters send to Washington D.C. in each election seem to have very little appetite to rein in their free-spending habits, where the opportunity to spend other people’s money on things that can make them more popular in their districts and states and thereby keep themselves in their seats of power is too good to ever willingly give up.
Unless they’re forced to by a new constitutional amendment, that is! Writing in the Washington Post, opinion columnist George Will recently reflected on his view for the need for a new balanced budget proposal.
The federal debt held by the public was 39 percent of gross domestic product 10?years ago; it is 75 percent today. Before last month’s tax changes, the debt was projected to reach 91 percent in 10 years. No one knows whether the tax changes will hasten this; no one should assume that they will not. No one knows at what percentage the debt’s deleterious effect on economic growth becomes severe; no sensible person doubts that there is such a point.
We will discover that point the hard way, unless Congress promptly sends to the states for prompt ratification a constitutional amendment requiring balanced budgets. The amendment proposed by R. Glenn Hubbard, dean of Columbia University’s business school, and Tim Kane, economist at the Hoover Institution at Stanford University, would limit each year’s total spending to the median annual revenue of the previous seven years, allowing temporary deficits to be authorized in emergencies by congressional supermajorities.
Because reverence for the Constitution is imperiled by tinkering with it, and because the supply of ideas for improving Madison’s document always exceeds society’s supply of Madisonian wisdom, the document should be amended rarely and reluctantly. Today, however, a balanced-budget amendment is required to counter two developments: the abandonment of the original understanding of the Constitution and the death of the political morality that expressed that understanding.
In focusing on the publicly-held portion of the U.S. national debt, Will is understating the full magnitude of the U.S. government’s total public debt outstanding, which through the end of the government’s 2017 fiscal year, already exceeds 103% of the nation’s gross domestic product.
But even with the U.S. national debt being that much worse of a burden, does it make sense to impose a constitutional restriction like the balanced budget amendment proposal he cites to compel U.S. politicians to restrain their spending? Why set such a complicated approach for setting an annual spending limit for the U.S. government into the U.S. Constitution? Won’t politicians game the system to get out from under its restrictions?
Will argues that yes, they will, which is why the nation needs a balanced budget amendment:
Critics of a balanced-budget amendment warn that Congress will evade it by means of creative bookkeeping, stealthy spending through unfunded mandates on state governments and the private sector, the promiscuous declarations of spurious “emergencies” and other subterfuges. Such critics inadvertently make the case for the amendment by assuming that the political class is untrustworthy. And that the people’s representatives unfortunately are representative of those who elect them.
What do you think? Is it time for a new balanced budget amendment? And if so, what might be a better way to put the U.S. government onto a more sustainable and fiscally responsible path?