A Balanced Budget Amendment Is Still a Stupid Idea

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Government “Debt in itself is not harmful” is spend your way out of recession has been tried. Tried by Japan and G20. They have given up. Of course liberals say spend a few more $ trillion and it will work. Liberals will make the rich pay the debt so the little person is saved from the poor house. Liberals will spend the principle until the principle no longer exist.
Jobs saved you can not count. Green stimulus jobs 80% of which went over seas, TAX AND SPEND, EPA expansion, etc. Oh the non-sense ideas liberals have. Liberals CROWN JEWEL OBAMACARE waits to go into full effect after next Presidential election. If, if it saved money we need it all now. They know it won’t.
Even G 20 gave up on spend out of recession and are licking their wounds. This time you liberals got the power. Elections and polls show people have bad taste in mouth. Throwing up sick. The tar & feathers is ready for liberals.
Missouri has BALANCE BUDGET LAW and works just find. Well with a twist. Can’t raise taxes, except for fees, that controls taxes.
Democrats Congress passed pay as you go. For show. Was immediately ignored when enacted. Like in first increase legislation Republican who demanded increase be paid for was demonized by Democrats and press. Make law emergency bill and forget pay as you go. Lots of tricks for the leeches to pull in Congress.
Sarah Palin cleaned the gutter rats out of Alaska’s legislator. Republicans you bet were included. A rat is a rat. Must be exterminated. November is near.
Bob of Texas idea “A reasonable compromise may be to limit the debt to 50% of GDP and use that as a limit that congress must adhere to” sounds good. Expect there are many good ideas.
Simply. No spend out of recession need apply. It was tried with my money they took from my taxes, my social security I paid into as well as my medicare payments I made. Now what I paid for is in doubt if I will reap my goods.
“G20 Drops Obama’s Keynesian “Spend Your Way Out of a Recession” Economics”.
Bury it unceremoniously.
http://gatewaypundit.firstthings.com/2010/06/g20-drops-obamas-keynesian-spend-your-way-out-of-a-recession-economics/
Keynesians was to live a thousand years. It didn’t.
“China Lectures Obama Administration Again About Rampant Borrowing & Debt”
“Communist China warned Obama and Democrats about printing money last May. Communist China warned Obama and Democrats about their historic deficit last June.”
“Communist China laughed at tax-cheat Geithner when he said their assets were safe last summer.”
http://gatewaypundit.firstthings.com/2010/05/china-lectures-obama-administration-again-about-rampant-borrowing-debt/
“Japan's Disastrous Keynesian Experiment’’
http://www.aei.org/outlook/7119
We still have the Clinton housing and economic mess and now the so called Keynesian cure to contend with.

Bill Hedges of MO 10:28PM August 10, 2010

Republicans and Democrats alike are motivated to increase their voter base at home and their power base in Washington by providing bread and circuses to the people. The only difference is that Republicans tend to borrow and spend, while Democrats tend to tax and spend.
The removal of wealth from the private marketplace to the public monopoly is what chokes the life out of the economy. It matters much less which of the two means--taxing or borrowing--is selected to remove it.
Free market forces did not create the recent crash. That was the product of collusion between Big Brother government ("Sure, we'll guarantee that loan for you!") and Snake Oil salesmen ("Sure, you can afford that loan and my fee!").
The massive "stimulus" spending did not cure the economy. It just shot the economy up with heroine. So now we have withdrawal pain from short-term government opiates on top of the cancer pain from long-term government growths.
Bush was bad with money. Obama is worse. Can we get a real surgeon in the operating room next time? Doesn't have to be a brain surgeon. Just a surgeon...with a brain.
2012 is two years away. I'm afraid all we'll get in the 2010 election is more bread and circus acts from the Congress. The Republicans will give you a ten dollar ticket for free, then bill you later. The Democrats will take your twenty dollars now before they give you the ten dollar ticket for free.

Jack Resiak of NC 6:22PM August 10, 2010

I agree that saying we must balance the budget and cannot raise taxes is stupid. But that does not mean that some type of limit on federal government deficits is unreasonable. Politicians of both parties will not do their jobs, so some type of constitutional limits are required to make them do so. The current problem is that we are facing ten years of excessive debt. Our debt as a percentage of GDP will approach those of Greece and Spain in ten years. We know what great shape those two countries are in (Spain's unemployemnt is almost 20%). A reasonable compromise may be to limit the debt to 50% of GDP and use that as a limit that congress must adhere to.

Bob of TX 6:09PM August 10, 2010

Without massive federal spending we get chronic stagnation. This is the real reason that the federal budget has never been balanced and why both Democrats and Republicans will never support an amendment to require it. Deficits are only a problem when there is full employment and the economy is running at full capacity. But if there are private sector surpluses, this major leakage of effective demand requires that the government spend those private savings in order to stimulate the economy. Growth and tax base will cover the deficit. Stagnation will make it worse.
"Current fiscal deficits in fiat currency countries are not the cause of the Great Recession but the consequence of the Great Recession, which was the consequence of the blowing up of asset price bubbles and Ponzi debt arrangements in the private sector. If current fiscal deficits had not been allowed to unfold, the Great Recession would now be the Great Depression 2.0...What the developed world faces is a cyclical deficiency of aggregate demand, the product of a liquidity trap and the paradox of thrift, in the context of headwinds born of ongoing structural
realignments. Front-loaded fiscal austerity would only add to
that deflationary cocktail. And that’s what the market vigilantes
are wrapped around the axle about: they are not fleeing the sovereign debt of fiat currency countries but rather fleeing risk
assets, which depend on growth for valuation support...fiscal austerity is not the path to growth if everybody wants to do it at the same time. The risk-asset vigilantes, who rightfully fear fiscal austerity–induced deflation, are in charge, not the bond market vigilantes of our youth, who feared fiscal profligacy–induced inflation...But cyclically speaking, current fiscal deficits in fiat currency countries are a blessing, not a curse. So, if you are cursing the lousy performance of your risk-asset portfolio, do not blame fear of fiscal deficits in fiat currency countries. Rather, blame fear of the austerians’ desires to cyclically do something about them."
http://www.levyinstitute.org/pubs/pn_10_02.pdf
So long as the private sector is running large surpluses, the government can borrow cheaply to stimulate growth. Governments, unlike businesses and households, can run deficits for a long time because they issue currency, hold long term debts which can be paid off over the space of decades and have unshakable credit. If this were not true we would be more like Greece than we are Japan and our bond interest rates would be much higher.
The private sector is investing but not in output. They invest in financial securities, mergers and acquisitions or simply hoard cash in fear of a coming deflation. Fiscal austerity would not address the issue of deflation or lack of effective consumer demand but merely worsen it. Those who complain about the deficit have no alternative to stimulus which helped us avoid a major depression. On this there is across the board agreement.

steve of IL 3:26PM August 10, 2010