Balanced Budget Amendment

[JollyRoger]

Good try at waving a red flag.

I am saying that responsible borrowers don't have a problem with loans.

The American people (through the people they regularly reelect) have not demonstrated responsible borrowing behavior.

Until they do, it is time to clamp some restrictions on the enabling behavior. Once America decides to behave as an adult fiscally, you can drop the ammendment. Or not.

How has the U.S. demonstrated irresponsibility? It is able to borrow at favorable rates from people that do not have a lot of recourse in the case of default.

 

[bugwar]

How has the U.S. demonstrated irresponsibility? It is able to borrow at favorable rates from people that do not have a lot of recourse in the case of default.

OK, when our principle loan shark, China, starts warning us to watch our finances, I take that as an indicator that we are borrowing way too much.

 

[GoodSarmatian]

It clearly was a genocide, however. I didn't say only one side was responsible, but one side is to blame for starting it.

That depends entirely on how inclined one is to throw this word around lightly.

And no, the bombing didn't escalate the violence, it ended it.

That is wrong. Not wrong as in I wouldn't call that a genocide, but wrong as in factually incorrect. Mass displacement of Albanians began after the bombs started to fall.

My bad, I was only meaning to clarify something for GhostWriter16, then the German Haters Group attacked. I'll leave it alone now

Well, the war is much more controversial in Germany due to our pacifist constitution which calls for a minimum sentence for 5 years in prison for starting a war of aggression which is every war/intervention that is not fought in self defense or under a UN mandate.

 

[hobbsyoyo]

OK, when our principle loan shark, China, starts warning us to watch our finances, I take that as an indicator that we are borrowing way too much.

Nah, the Chinese couldn't hurt us appreciably without them scuttling their own economy.

That depends entirely on how inclined one is to throw this word around lightly.


That is wrong. Not wrong as in I wouldn't call that a genocide, but wrong as in factually incorrect. Mass displacement of Albanians began after the bombs started to fall.

I'll leave it alone now

You can PM if you feel like it, but I don't know how much longer I'll be on today. If I don't respond immediately, I will get around to it. I don't ignore people.

 

[Disgustipated]

Who'd thunk a topic like national fiscal policy would degenerate into war crimes tribunal's so quickly?

Oh wait, this is an internet forum. Of course it deviates within three posts.

Yes it was my fault for unfairly signaling out Republicans as starting wars. Democrats are by no means innocent. Clinton did start the Kosovo war, and you can argue Obama bombed Libya, but he was pulled into it, and I don't fault him too much for that (except for being weak toward European countries). Johnson is an easy one, I won't even go into him. But until Obama starts 2 wars the size of Iraq and Afghanistan, I will give democrats a pass for now. They may have learned their lesson.

Please discuss your opinions on a balanced budget, and we can make a new thread on which president is responsible for starting which war.

So back to the balanced budget...

I don't think the mortgage comparison is an accurate comparison. Buying a house is a serious purchase. The only government equivalent would be like an government building an entire army from scratch. But we don't need to do that. We already have an army, it's just a matter of maintaining our existing one. Or another argument might be like building the interstate system from scratch. Our country has needed infrastructure in place (barring any major technological advancements), it's a matter of maintaining the existing infrastructure which I believe can be done with a balanced budget (by cutting defense and entitlement spending and raising taxes).

 

[Cutlass]

I don't think the mortgage comparison is an accurate comparison. Buying a house is a serious purchase. The only government equivalent would be like an government building an entire army from scratch. But we don't need to do that. We already have an army, it's just a matter of maintaining our existing one. Or another argument might be like building the interstate system from scratch. Our country has needed infrastructure in place (barring any major technological advancements), it's a matter of maintaining the existing infrastructure which I believe can be done with a balanced budget (by cutting defense and entitlement spending and raising taxes).

A government operating as a household, or as a business, borrows money for 2 good reasons: Investment to improve it's economic condition for the future, and to smooth out consumption by borrowing in bad times and paying it off in good times. And, like households and businesses, governments can borrow for bad reasons: To throw a party or fund continuous consumption.

A balanced budget amendment would force the government to not do the good things because it opens the door for the bad ones.

 

[bugwar]

A balanced budget amendment would force the government to not do the good things because it opens the door for the bad ones.

Depends on the wording of the ammendment.

Cities have balanced budgets, and they borrow. They only borrow though, when they get the voters to agree to increase taxes to pay for the loan.

So if the ammendment says that the Government can borrow a trillion dollars now, and pay it back with tax increases of 'X' amount, and the voters agree to it, I have fewer objections to federal borrowing.

Won't like it, but at least that way we can only blame the voter, not congress.

 

[Disgustipated]

A government operating as a household, or as a business, borrows money for 2 good reasons: Investment to improve it's economic condition for the future, and to smooth out consumption by borrowing in bad times and paying it off in good times. And, like households and businesses, governments can borrow for bad reasons: To throw a party or fund continuous consumption.

A balanced budget amendment would force the government to not do the good things because it opens the door for the bad ones.

I will always believe private enterprise fuels the economy, not the government.

Depends on the wording of the ammendment.

Cities have balanced budgets, and they borrow. They only borrow though, when they get the voters to agree to increase taxes to pay for the loan.

So if the ammendment says that the Government can borrow a trillion dollars now, and pay it back with tax increases of 'X' amount, and the voters agree to it, I have fewer objections to federal borrowing.

Won't like it, but at least that way we can only blame the voter, not congress.

That could work, and could work well for the example I mentioned above (major technological advance requiring massive infrastructure building).

 

[History_Buff]

Tell that to Greece. You can abuse your lenders only so much, then they wise up.

I'm not advocating unlimited budget deficits. Even US finances are somewhat out of control, but not to an urgent degree. It's much more of a political problem than a financial one.

The US is not Greece, nor are most nations.

Useful purpose. I don't know if I agree with this choice of words. I'd call deficits a necessary evil in economic downturns. A really necessary evil if you don't want the economy to plunge into a deep and long recession. Robbing government of this kind of flexibility is sheer idiocy.

I stand by it. Obviously a targeted Keynesian stimulus is a good tool to have. But it goes beyond that; deficit spending allows you to keep funding social programs when your budget predictions are off, and thus spread surpluses over deficit years. Allows you to make large scale capital investments now, and pay them off later.

It's useful in the same way that a mortgage or line of credit is to a person. With the added benefit that governments don't retire, and are unlikely to die, so the need to pay them quickly is largely eliminated.

 

[JollyRoger]

OK, when our principle loan shark, China, starts warning us to watch our finances, I take that as an indicator that we are borrowing way too much.

Given the low rates to borrow and continued ability to borrow at such a rate, I do not see where you are getting the loan sharking nonsense from.

 

[bugwar]

I'm not advocating unlimited budget deficits. Even US finances are somewhat out of control, but not to an urgent degree. It's much more of a political problem than a financial one.

You got the political problem part right. If the politicians would work together, no problem. Since they don't, and the voters don't care to see to it that they do, the ammendment serves in the stead of responsible leadership.

The US is not Greece,...

Yet.
It is not for lack of trying, though.

 

[JollyRoger]

You got the political problem part right. If the politicians would work together, no problem. Since they don't, and the voters don't care to see to it that they do, the ammendment serves in the stead of responsible leadership.

How is it irresponsible to inflexibly cut the ability to borrow?

 

[GoodSarmatian]

You got the political problem part right. If the politicians would work together, no problem. Since they don't, and the voters don't care to see to it that they do, the ammendment serves in the stead of responsible leadership.

It could prevent irresponsible behaviour, but it can't replace responsible leadership.
It's like hacking your drunk friend's hands off to prevent him from drunk driving. A permanent solution to a temporary problem, full of nasty side effects.

 

[bugwar]

How is it irresponsible to inflexibly cut the ability to borrow?

I'm sorry, auf English, bitte.

 

[Integral]

A balanced budget over a year is such an arbitrary timeframe and typically has nothing to do with the underlying economic situation.

I'd be willing to consider a balanced-budget proposal over the business cycle, but even that is probably not a great idea.

 

[GoodSarmatian]

I'd be willing to consider a balanced-budget proposal over the business cycle, but even that is probably not a great idea.

So, how long is a business cycle ? I thought we can only know in hindsight when ove has ended.

 

[bugwar]

It could prevent irresponsible behaviour, but it can't replace responsible leadership.
It's like hacking your drunk friend's hands off to prevent him from drunk driving. A permanent solution to a temporary problem, full of nasty side effects.

Yep. But until (if) America grows up again, you do what you can.
Otherwise, well, every nation disappears eventually...

 

[JollyRoger]

Otherwise, well, every nation disappears eventually...

A balanced budget amendment would just accelerate the process.

 

[bugwar]

A balanced budget amendment would just accelerate the process.

Because...?

 

[JollyRoger]

Because...?

We would not be able to tax people enough to meet the balance without massive destruction of the economy.