A Balanced Budget AmendmentJuly 18th, 2011 by Lee Eldridge
I do some writing for other websites, and I don’t always post the articles here. Last February I wrote an article about a possible federal balanced budget amendment. The primary reason I didn’t post the article on my personal blog is because I don’t think there’s a chance that it will ever pass. It seemed like a moot point, but since the Republicans seem determined to at least give it a go, then maybe it’s worth posting now. (I did make a few minor updates compared to my original article.)
Federal Balanced Budget Amendment: Theory vs Reality
February 7, 2011
By Lee Eldridge
I’ve long made a joke that credit cards are evil. But that’s not true. When a person uses a credit card responsibly, credit cards are not evil at all. Try renting a car or making a hotel reservation without one. Credit cards also offer a level of protection when you make purchases. For instance, if you buy something online, and you’re unhappy with it, you have the option of disputing the charges. It can protect you from many of the possible dangers of purchasing something from an unknown company.
The problem is that many of us do not use credit cards responsibly. When my wife went back to school to finish her degree, we were making very little money. We were partially living off student loans and credit cards. By the time she got out of school, we had racked up thousands in debt. We were buried with it, and we considered bankruptcy.
We went to a credit counseling service instead, chopped up our cards, and made monthly payments until we were out of debt. It’s a liberating feeling to make that final payment. We never looked back. We no longer use credit cards. If we can’t afford it, we don’t buy it. We have learned the hard way that we’re better off without them.
Many have had similar problems with credit cards and the accumulation of debt. It doesn’t mean credit cards evil. It just means that we’re not always responsible enough to use them properly. Because of our access to “money” on our credit cards, we were spending more money than we were making. We were running a budget deficit every year.
Does this remind you of our federal government at all?
Since 1961, our federal government has run budget deficits every year except for five: 1969, 1998, 1999, 2000 and 2001. They spend more money than they receive in tax revenues almost every year.
Some have brought up the idea of a balanced budget amendment. This would force the federal government to balance their budget every year, and eliminate budget deficits.
In theory, I disagree with this approach. But in reality, it needs to be considered.
Why? It’s kind of like credit cards. In theory, credit cards are useful and offer purchasing protections for consumers. But in reality, many consumers use them to buy products they cannot afford.
In theory I oppose a balance budget amendment. In times like these when our country is in a recession, or is coming out of a recession, tax revenues to the federal government are down. A balanced budget amendment would force the federal government to reduce services during a time we need them the most.
But reality shows us a different picture. If the federal government ran budget surpluses during the good times, we could trust them to make good decisions and allow them to run budget deficits during the bad times. The problem is that our government seldom runs budget surpluses, even during the good times. They just continue to increase spending in good times and bad.
They are not responsible with our money, and it’s time to chop up their credit cards. It’s time for a balanced budget amendment.