The Balanced Budget Amendment: Not Ready for Prime Time
July 11, 2011
Tax Notes, Vol. 132, No. 2, 2011
The proposed balanced budget amendment is actually a spending limitation amendment. It would limit federal spending to 18 percent of GDP. This article argues that using GDP to calculate the maximum amount of spending is grossly inappropriate, especially for a constitutional amendment, because the term is nowhere defined in law, nor could it be because it is constantly being revised for both technical and conceptual reasons. Furthermore, there is no practical way of enforcing a balanced budget amendment.
Number of Pages in PDF File: 3
Keywords: balanced budget amendment, gross domestic product
JEL Classification: H10, H50, H60
Date posted: July 11, 2011