…and California. There is only one solution: to cut spending:
That is why, together with Mike Pence and John Campbell, I have offered H.J. Res 79, a Spending Limit Amendment to the Constitution of the United States that would limit spending to one fifth of the economy — our historical spending average since World War II. The limit could only be waived by a declaration of war or by a two-thirds congressional vote.
I hate to put an arbitrary percentage like that in the Constitution, but we have to do something to do get this under control. But it would have to include entitlements, too. There can no longer be such a thing as “non-discretionary” spending.
[Update a few minutes later]
Bruce Bartlett thinks it’s an awful idea, for many reasons (including the one I mentioned). I think that Pence and Hensarling are going to have to go back to the drawing board.
I think the exception they invision, that with a declaration of war the arbitrary limit could be lifted, can be insightful.
What it tells me is that Pence and Campbell think the government has a duty to protect the rights and lives of Americans. Implicitly (whether known or unkown to them) what they are saying is that arbitrary spending limits shall not obstruct the government’s performance of this duty, because accomplishing that duty is its only legitimate reason for existence. If these other activities were legitimate duties, they wouldn’t consider forcing them into an arbitrarily sized budget box, just as they won’t force the defense of america into that box.
It just helps to show that the ultimate answer is to cut out all the fluff that the government has no legitimate power to spend our wealth on.
Wouldn’t pass, and Congress would simply pretend to be obeying it while disobeying it. (Apart from Bartlett’s objections, which are all sound.)
The problem is Congress, not the Constitution.
If Uncle Sam presented a bill at the end of every year, SHeriff of Nottingham-style, and people then had to cough it up, raising taxes would be far more hazardous to politicians’ health than it is today. Perhaps it would also make sense to move income tax day from April 14 to, oh, I don’t know, November 1? That way people would be more inclined to take tax issues seriously when they pull the lever.
Or move Election Day to the first Tuesday after April 15.
For many years the municipal elections in Anchorage were held in April. Since they’ve moved the date, the city’s officeholders have been far more liberal.
If a Constitutional amendement strategy were possible (on which I am skeptical), the approach I’d take is eliminate the authority of the Federal government to borrow money. There could be an exception during time of declared wars, amount of borrowing not to exceed amount of spending on that war.
While everything can be gamed, this strikes me as less prone than most approaches. Long-term, while tax rates will fluctuate, they will fluctuate around the revenue-maximizing point, as Congresses that raise taxes past that point will find themselve with less rather than more revenue.
However, I expect that we will reach the situation of a sharp drop in Federal borrowing due to a shortage of willing lenders before any Constitutional change could be completed.
It’s a nice idea in principle, but I suspect the 2/3 exception would be quickly overcome. More importantly, I’m sure this would be a recipe for the regulatory state, since new mandates don’t cost the government anything.
I always thought that you could control government through tax freezes, but obviously that doesn’t work because they just blow by the budget and keep on going on borrowed money. So some kind of spending brake has got to be devised.
The EU enforced debt and deficit limits on countries in the Eurozone. You can guess how well that worked (hint: Greece is in the Eurozone).
Jeff – You’d need to take away the governments ability to print money as well, or they’ll just “borrow” money by destroying the value of yours (inflating the money supply). And you don’t even need to find a buyer/lender, just hire a few people to manage the print presses.
Ryan, the solution there is to use a currency that the government in question doesn’t control. It could be a rival government that keeps its spending under control, an asset based currency (like gold), etc.
Karl, I am in agreement.
When AT&T got too big for consumer welfare in 1982, the answer was to break it up.
The consqeuences of printing money (these days, of course, the Fed just types numbers in to computers) are likely to come due within the political careers of those responsible for it. Organizations, like organisms, respond to pain. Note that the U.S. has had inflationary periods that have then led, several times, to a return to stable monetary policy as the consequences have become apparent.
The unique problem of massive borrowing is that it is a tax on future generations and the government doing it feels no pain for a long time. In a sense, like jumping off a building, it feels fine until the sudden stop at the end. At this point, our choice is whether or not to make that “sudden stop” into a soft landing by voluntarily ramping down our borrowing (which requires ramping down spending) — or not.