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Ny Times Against A Balanced Budget It Seems

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http://www.nytimes.com/2011/07/05/opinion/05tue1.html?_r=1&hp

If there is to be any sensible deal to raise the debt limit, they also need to rebut the amendment’s false and dangerous premises — not an easy task given the idea’s populist appeal.

What could be more prudent than balancing the books every year? In fact, forcibly balancing the federal budget each year would be like telling families they cannot take out a mortgage or a car loan, or do any other borrowing, no matter how sensible the purchase or how creditworthy they may be.

Worse, the balanced budget amendment that Republicans put on the table is far more extreme than just requiring the government to spend no more than it takes in each year in taxes.

The government would be forbidden from borrowing to finance any spending, unless a supermajority agreed to the borrowing. In addition to mandating a yearly balance, both the House and Senate versions would cap the level of federal spending at 18 percent of gross domestic product.

That would amount to a permanent limit on the size of government — at a level last seen in the 1960s, before Medicare and Medicaid, before major environmental legislation like the Clean Water Act, and long before the baby-boom generation was facing retirement. The spending cuts implied by such a cap are so draconian that even the budget recently passed by House Republicans — and condemned by the public for its gutting of Medicare — would not be tough enough.

More at the link.

Where as continually allowing the amount of debt to grow isn't a risk?

A balanced budget would clearly shrink US GDP massively as it would remove the distortions the govt is creating in the economy by perpetually deficit spending.

Not sure the Republicans would vote this through as clearly it would impact on the defence budget, too many VI's involved for a balanced budget to be run.

The idea that if you run a balanced budget you can't afford anything is a folly, the cost of providing goods/services would reduce, although this wouldn't happen instantly there would be a period of readjustment.

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http://www.nytimes.com/2011/07/05/opinion/05tue1.html?_r=1&hp

Not sure the Republicans would vote this through as clearly it would impact on the defence budget, too many VI's involved for a balanced budget to be run.

The idea that if you run a balanced budget you can't afford anything is a folly, the cost of providing goods/services would reduce, although this wouldn't happen instantly there would be a period of readjustment.

Some more background on this in the following presentation : http://www.bipartisanpolicy.org/sites/default/files/Debt%20Ceiling%20Analysis.pdf Utterly scary to see the gap and expenditure on defense. Moreover effectively 18% of all USA (tax?) income appears to be paid to defense companies!

We clearly live in interesting times....

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There is a difference between a balanced budget and a balanced budget with a cap on tax take.

This is just the Republican party trying to pretend they are the party of small government when in reality they both cut taxes (for the uber wealthy) and increase spending on wars every time they are in charge.

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In fact, forcibly balancing the federal budget each year would be like telling families they cannot take out a mortgage or a car loan, or do any other borrowing, no matter how sensible the purchase or how creditworthy they may be.

Some level of government borrow seems to be inevitable, at least in countries like the US.

But there's borrowing and there's borrowing.

A car loan for example. In normal circumstances, a borrower pays back so much a month until the debt is repaid.

There is no sign that the US (or the UK) is ever going to be able to repay their debts.

There's a difference too between borrowing for a car and paying for it out of money you earn, and paying for your essentials using a credit card.

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Guest sillybear2

Balanced budgets = very limited military expenditure, and all that entails.

The Republicans haven't exactly thought this through, still, they're just doing what their rich paymasters are demanding, which is to cut everything before you raise a cent in any extra taxes. Why levy corporation tax and permanently leave them out of pocket when companies can just lend their surpluses to government at interest?

However, there are formidable corporate lobbying groups representing rapacious government contractors that are in annual receipt of billions in largess, these companies are used to receiving the full bite of the cherry from all that freshly minted (borrowed) money. Politicians are often all macho when it comes to this shit, right up until the moment some giant Lockheed Martin plant in their district is threatened with closure, then they're suddenly in support of these programmes. That's why good contractors have plants located in all good politically sensitive areas, it's very clever.

Corporate America will suddenly become very anti-tea bagging once they work out these people will also take away their free sweets, Uncle Rupert might go all "fair and balanced" on their a$$es.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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