Balanced Budgets and the Withering of U.S. Fiscal Policy: The Outlines of a Postwar American Fiscal Constitution
University of Canberra
In their famous book, Democracy in Deficit, James Buchanan and Richard Wagner define the notion of fiscal constitution: Whether they are incorporated formally in some legally binding and explicitly constitutional document or merely in a set of customary, traditional, and widely accepted precepts, we
can describe the prevailing rules guiding fiscal choice as a `fiscal constitution.'(Buchanan and Wagner 1977, 21) This paper analyzes the history of American fiscal policy from post-World War II to the Gramm-Rudman Act of 1985, using the fiscal constitution concept as a framework. The paper generally finds that the fiscal constitution loosened considerably during that period, but did appear to have some real tightening as a result of Gramm-Rudman.
Number of Pages in PDF File: 47
Keywords: budget policy;budgets;fiscal constitution;fiscal policy;American fiscal policy;postwar fiscal policy;Kennedy Tax Cut;Gramm-Rudman;public choice
Date posted: February 4, 2008