29 March 2011

Waste of Time

The ASI makes a misguided proposal:

The UK, like the US Federal Government does not have a balanced budget amendment. Parliament can pass a law without a supermajority as an act of parliament, only needing a simple majority. If there was a balanced budget bill, it will need to be like the German amendment. It will need to phase out deficits over a period of time and by the end of the time allocated, the Chancellor cannot spend more than he gets in, just like a normal household budget.
Obviously, Parliament can repeal a law just as easily as it can enact it – but experience has shown that this can be quite difficult for governments. At the very least, the law would be a roadblock to deficit spending. By passing a law banning deficits, we may see our government finances being put into place.

This is a blindly idealistic proposal, for it assumes that politicians will be honest, and will actually comply with attempts to curb their power.  In order for politicians to get around these constraints, they can do things in lieu of cutting spending:  they can either raise taxes, or tinker with budgeting predictions/reports.  The former is unconscionable, the latter is simply dishonest.  Neither will actually address the issue, and so the proposed act will be more symbolic than practical.

If one is serious about addressing the budget, then would do well to recommend a hard cap.  I recommend passing an amendment that limits congressional spending to $2 trillion, with at least $500 billion being dedicated o repurchasing government debt, with no adjustments allotted for inflation.  I imagine that this would solve a good portion of America’s budgetary woes.  Since this proposal is actually serious, there is little chance of its passing.

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