Five Nobel-prize winning economists and two former members of the Council of Economic Advisors wrote a public letter saying, “Writing a requirement into the Constitution that the budget be balanced each year would represent very unsound policy.” They gave seven reasons why it was unsound. Those sounded impressive until I read what they wrote, but my undergraduate major is economics and my Ph.D. is business. I needed to ask someone with better qualifications and common sense. 

Mom would qualify if she were living. She was a Phi Beta Kappa in economics at Carleton College. She understood our home budget and Dad’s business budget. She pierced faulty arguments. Here’s what I’d ask her.   

                One: “A balanced budget amendment would mandate perverse actions in the face of recessions.” “Mom, why can’t federal governments create reserves for recessions? States do. The Swiss have eight year’s experience with a balanced budget amendment that allows parliament to adapt to recessions over a three-year business cycle.”

Two: “Unlike many state constitutions, which permit borrowing to finance capital expenditures, the federal budget makes no distinction between capital and current outlays.” “Mom, isn’t that an absurd non sequitur? Our federal Constitution doesn’t prohibit capital budgets, so couldn’t and shouldn’t Congress use them to fund capital improvements?  Wouldn’t it have prevented Congress from reducing capital improvements in favor of operating outlays since the 1950s, which costs us billions in productivity?  Almost every other industrialized nation uses capital budgets.”

Three: “A balanced budget amendment would invite Congress to enact unfunded mandates, requiring states, localities, and private businesses to do what it cannot finance itself.”  “Mom, shouldn’t we just make Congress behave? In 1994 protestors held “Stop the Mandate Madness” rallies on Capitol Hill and in 1995 the new Congress passed an Unfunded Mandates Responsibility Act that reduced, but didn’t eliminate, naughty unfunded mandates. Can’t we trust the fury of states to enforce that act since they balance their budgets?”

Four: “Balanced budget amendments …require super-majorities …[that] are recipes for gridlock.” Mom, can you believe this reason while Congress gridlocks itself over raising the debt limit? Wouldn’t a balanced budget amendment force Congress to annually act fiscally responsible?”

Five: “An overall spending cap, which is part of some proposed amendments, would further limit Congress’s ability to fight recessions, … increase high return investments paid for with additional revenue, [and] emergency spending.”  “Mom, couldn’t Congress adopt a cap somewhere between zero and it’s current $1.7 trillion deficit? And couldn’t capital budgets permit high return investments paid for with additional revenues?”

                 Six: “A Constitutional amendment is not needed to balance the budget, [because] the budget … recorded surpluses and reduced debt for four consecutive years.”  “Mom, can you believe they say this after Congress’ losing record since 1957 of 4-50? And isn’t it deceptive to label those four years surplus if operating deficits were covered by Social Security surpluses? In 2000 for example, Social Security revenue was $248 billion more than payouts while government operations ran an $18 billion deficit. The Treasury borrowed from Social Security to fund it’s operating deficit, identifying the loan as an ‘intra-governmental holding’ because the Social Security account is earning interest. But it’s debt and when added to existing public debt, increased the Treasury’s total debt. Mom, isn’t that admitting they have to pay it back?" 

                 Seven: “It’s dangerous to try to balance the budget too quickly in today’s economy.” “Mom, Congress is attempting to balance a ten-year budget in a few days. Wouldn’t a constitutional amendment make members practice every year? You used to tell me practice makes perfect.”

                  I miss Mom at times like these.