Wednesday, June 29, 2011

A Federal Balanced Budget Amendment is a Step Backward

Republicans are proposing a balanced budget amendment to the constitution. Since the Great Depression, there is widespread agreement among economists that governments should increase expenditures in hard times to stimulate the economy, paying off debts in good times both to reduce inflationary pressures and to prepare for the ability to increase expenditures the next time there is a recession or depression.

The Republicans are also refusing to consider any budget agreement that would raise tax income. They do this in spite of the fact that they just voted to cut tax breaks for ethanol production, a tax revenue increase that they do not seem to see as a tax increase. I would also point out that most Americans would not mind, nor even notice a $1 per year tax increase. The Republicans would apparently refuse to increase the debt limit, corresponding to the needs of the budgets that they already passed this year, rather than allow even a $1 per person tax increase. The entire international community and the community of professional economists agree that failing to raise the debt ceiling would be a very risky, with a strong possibility of triggering a global financial crisis.

I hope the electorate will recognize how stupid this is and vote out the Republicans at every near term opportunity.

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