In one of the most disgusting displays of bi-partisanship I’ve ever seen both Congressman Henry Cuellar and Senator John Cornyn are advocating for a balanced budget amendment. Both these highly educated gentlemen are lawyers and experienced legislators but obviously not economists.
Enshrining a balanced budget in our constitution would shackle our nation in times of disaster or war by preventing the federal government from spending on emergency needs without either immediately cutting spending elsewhere by the same amount thus cutting government services and putting government employees out of work or raising taxes precipitously to immediately offset that spending rather then spreading the payments out over time.
According to a blistering analysis of a Balanced Budget Amendment (BBA) by Macroeconomic Advisers, one of the nation’s preeminent private and non-partisan economic forecasting firms, if a constitutional balanced budget amendment had already been ratified and were now being enforced for fiscal year 2012, “the effect on the economy would be catastrophic,” Macroeconomic Advisers also concludes that under a balanced budget amendment, “recessions would be deeper and longer,” and uncertainty would be cast over the economy that could slow economic growth even in normal economic times.
In short Congressman Cuellar and Senator Cornyn should bone up on their economics before bring up this silly amendment ever again.