With another budget deadline looming, the Democrats continue to be opposed to the idea that to cut spending is crucial in tackling our nation’s $17+ trillion deficit. They’re wishing that the economy will grow in a time when most of the big impact laws emanating from their Senate majority can only do the opposite. Of course, there’s always the handy “make the wealthy pay their fair share” policy, which disregards the wealthy’s already significant contribution to the federal government’s revenue.[2, 3]
Why Large Federal Deficits Should Be Worrisome
A balanced federal budget is clearly in the best interests of everyone at this time. Without curbs on our government’s ever-expanding spending appetite, we end up with these dangerous scenarios:
Foreign entities buying large amounts of Treasury issues will have increasing claims on our wealth. When these underwriting countries have ideologies contrary to ours, this will threaten our sovereignty. Key example: according to U.S. Treasury data, at the end of October, 2013, China held just over $1.3 trillion, almost ¼ of the debt owned by foreign countries or 7.6% of our total federal debt. If this were the stock market, China would be required to make a bid for controlling interest in the U.S.!
As the debt grows, it decreases our ability to fund important programs because merely servicing the debt takes bigger and bigger pieces of federal revenue. In the interview cited in the opening paragraph, House Minority Leader Nancy Pelosi acknowledged that interest payments are 15% of the federal budget. This has become necessary because of the last 50 years in which deficits have been the rule, not a necessary exception to remedying an immediate crisis.
This will inevitably lead to serious inflation. Baby Boomers remember the tight money of around 1980 when the prime rate reached 20%!
It is clear that balanced budgets, and some with moderate surpluses, must be created soon. Our current deficit is a giant time bomb. Yet too many in Congress are more concerned about protecting their territory’s short-term interests than to take the necessary steps to avoid what is a humanly preventable disaster.
If So Serious, Why Not a Balanced Budget Amendment?
Fortunately, many are aware of the dangers of these imposing deficits. Some have called for an amendment to the Constitution which would force a balanced budget every fiscal year. As well-intentioned as that sounds, it is not a true solution, and it is actually a dangerous course of action for the long term.
Amendments are to ensure an inherent good or to protect us from intrinsic evils. The right of freedom of religion, the abolition of slavery, and protection from unreasonable searches and seizures are examples of issues appropriate for the creation of amendments. They are good for society, imposing no restrictions except those necessary to prevent infringement on someone else’s rights.
Amendments are not the proper place for policies or procedures which are desirable, but have varying degrees of benefit for society. Such should be enacted through laws which specify conditions of application.
A great example of this was the 18th Amendment, which established “Prohibition” and was later repealed by the 21st Amendment. The promotion of temperance is noble and contributes to a civilized society. However, alcoholic drink is not an intrinsic evil. It can be consumed responsibly in addition to having beneficial health effects in reasonable amounts. Therefore, a constitutional ban was inappropriate.
However, consequences for irresponsible actions involving alcohol should be established and are best handled through laws and regulations. These can be changed as frequently as technology or our understanding of the effects change.
The Constitution is a framework to be used for enacting laws; it is not a place to pile on a lot of details regarding how we wish to regulate everyday life.
Not All Budget Deficits Are Bad
While a balanced federal budget is usually a very good thing, there are times when deficit spending is appropriate and very necessary. The periods of the Civil War, World War I, the Depression, and World War II would not have had happy outcomes had deficits been unconstitutional. An unbalanced federal balanced budget is not an intrinsic evil and must not be banned through an amendment.
What Needs To Be Done?
If we remember that ours is a government “of the people, by the people and for the people” instead of “over the people,” then we have a chance. We have opportunities to hold our representatives accountable every two, four, or six years, depending on the office. Of course, we should also convey our positions to them while they are in office.
Most importantly, we need to inform our fellow citizens. How many are aware of the consequences of huge federal deficits? Looking back one year ago, how many voters were truly aware of the consequences of another Obama term, which we predicted then and are paying the price for now with lost freedoms and financial suffering?
The issue of reducing the federal deficit initially through reductions in spending exemplifies the reason Ohio Conservative Review was started. This platform is one way of encouraging fellow voters to look beyond the apparent “quick fixes,” to learn the history of key issues, and to act with the future of this country in mind, not just a short-term personal gain.
The federal budget is one such crucial issue. In the final analysis: “Yes” to balancing the federal budget, and “No” to tying the hands of future generations with a dangerously restrictive constitutional amendment.
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Oscar A. (Tony) Rubio is a writer who merges the lessons of history with current events to suggest a better path. He resides in Cincinnati, Ohio and believes that our national mood would be improved if we listened to more Big Band and Jazz as we look forward to the White House changing occupants on January 20, 2017. Tony blogs at www.cartaremi.wordpress.com and www.sportuoso.wordpress.com.
All opinions expressed belong solely to their authors and may not be construed as the opinions of other writers or of OCR staff.
1 – “So, it is almost a false wrong to say we have a spending problem. We have a deficit problem that we have to address. Right now, we have low interest on the national debt and it’s a good time for us to act to lower the deficit.” Quote from Nancy Pelosi in an interview with Chris Wallace, 2/10/2013, www.nation.foxnews.com.
2 – “the top 1 percent pay 37 percent of all federal income taxes. The top 5 percent pay 59 percent of all federal taxes. If you took the total income of everyone making more than $1 million a year, if you taxed it all, at 100 percent, that’s only $726 billion, which is less than the projected deficit for the year.” – Chris Wallace in the same interview as in footnote #1
3 – Additional data from the National Taxpayers Union, for 2009: the top 10% earners based on AGI paid 70% of the personal federal income tax paid
4 – from www.usgovernmentspending.com, the end of World War II slowed high spending, what similar event is available to curb spending now?