Amending the Budget

            A current debate concerns the merits and passage of a Constitutional Amendment to balance the Federal budget. Perhaps we could, unlike we did with health care, look towards best practices of other first world nations who have a balanced budget. Are there  any  first world nations with a balanced budget? I know of no democratic nations with a balanced budget. Please....please enlighten my ignorance if this is wrong.

            As far as I am aware, every democratic Government spends more than it takes in. One might point out that China owns much of the United States from forty years of paying our national credit card. This is true. It is also ironic that the strongest economic growth globally is occurring in a Communist country. China has had a surplus since 1999. However, it is autocratic and owns the economy. Don't confuse trade surpluses with budgetary surpluses. US trade is at a disadvantage around the world from other nation's high import tariffs. Perhaps we should have matching trade tariffs, as one gentle reader points out. The other country gets to set whatever number it wants as tariff for our imports. Their exports will receive that same tariff. Seems fair to me. We could call the policy Golden Rule Economics (GRE) or Level Playing Field Economics (LPFE), whichever name you think works better.

            So there is a relationship between economics and national budgets. China has a budgetary surplus because it has an economic surplus. In China the national budget and the economy are the same entity. In democratic countries, they are separate. So until we nationalize all business and banks (I'm sure Obama's next agenda item on Fox News), we must look to the nonsense which is Congress to determine our national fiscal book balancing.

            Congress has always spent more than it takes in. All modern democratic nations spend more than they take in. All nations borrow their debt. Bottom line, you can't run a modern Western nation forced to "balance its budget".

            You can be more fiscally responsible, however. You can reduce the amount of debt you owe as a nation. That's possible and a good thing. Congress has to reduce spending. Sounds simple, unless you're an out-of-touch-with-reality addict jonesing for borrowed money.

            One might point to State balanced budgets. States either fire teachers and firefighters or borrow the money from the Feds. State balanced budgets are an illusion for the most part.

            One must learn the lesson of the gold standard. Our country was taken off the gold standard because it limited the size and growth of our economy. Our money was only as good as the amount of gold we had in storage. Our economy is many times larger than our gold reserve (if we do in fact still have a gold reserve). So now the value of our money is based on the "faith" people have in it. There's a scary thought.

            A related topic is the debt ceiling. When and why was the debt ceiling introduced? It was introduced during WWI as an acknowledgement that we had not a clue how much money a global war would cost. We are the only nation in the world with a raise-able debt ceiling (the other country never raises theirs).

            The realistic reason we have a raise-able debt ceiling and more spending than revenue is that we don't live in a bubble. We live in an unpredictable, dangerous, complex interdependent and dynamic world that can't be limited by the amount of cash in the wallet. Smart people have a credit card for emergencies. A debt ceiling is the emergency credit card (if you have to say start a foreign war for a decade).

            The other reality is that Congress has always spent taxpayer money like drunken sailors. We've just been drinking a lot more since Reagan. So the "Amendment" is less a realistic response to a turbulent environment and more a moral brake on Congressional excess. There is a more simple solution....pay-go. Spend whatever you want, but pay for it from revenue. Stop borrowing foreign money.

            Pay-go requires discipline, commitment and courage, three qualities in short supply in Washington. Can't work...not realistic.....you might state. It did....for four years. Bill Clinton and his bipartisan Congress were the only time in our nation's history (correct me if I'm mistaken) when we had a "surplus" and balanced budget in Congress. Sure I know that there was a bunch of stuff never included in Congressional budgets (>70% of our spending according of OMB). But...the spending that was included was balanced.

            We don't need a "constitutional amendment". Do you how difficult those things are to get passed. Congress does. So they have no intention of passing one. Bear that in mind. It's all show and symbol. We do need pay-go rules and some bipartisan backbone. It's worked before. Maybe we need to get the geezers back in office to show the Tea Party how it's done.

            In order to renew our Government, we as a People must be informed. The CBO/ OMB should put out a yearly report on our actual deficit and spending in a fashion that all Americans can grasp. Ross Perrot will help you with the charts. Renewal might require a clean sweep and radical finance reform. Insider trading and personal enrichment might actually be criminal and prosecuted offenses (looking at you most of Congress). It might be decided in national debate that term limits be imposed. The filibuster as practiced might be changed. Campaign finance reforms might limit contributions of man and beast, I mean corporations, to the same small amount. If Exxon and Jimmy Joe can both only contribute the same amount to keep a bum in office, and all those contributions would be transparently reported, the System would be fairer and more representative.  If our policy creation became less corrupt and less big-money driven, we actually might get a Government that works for the benefit of the People and our general welfare (heard that phrase somewhere). How bout that protestors?