The Irrelevance of Balanced Budget Amendments
James M. Buchanan: A Theorist of Political Economy and Social Philosophy, ed. Richard E. Wagner, Forthcoming
20 Pages Posted: 26 Jun 2018
Date Written: May 2018
Today, the debate about public indebtedness has reached a fervor not often seen among professional economists and the general public. This has renewed considerations of requiring Congress to balance its budget, through either a Constitutional amendment or some other legislative or statutory means. But what effect would such a requirement have on the actual practice of federal spending? Conventional approaches to answering this question are typically empirical in nature, perhaps looking at the budgets of individual states and the patterns of spending before and after balanced budget requirements were put into practice. This paper takes a different tack, instead exploring the process by which figures of federal revenues and expenditures are constructed and what effect requiring these constructed figures to be equal would have on actual underlying fiscal realities.
Keywords: public debt; public finance; emergence; fiscal sociology
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