Finley: Tear up national credit card
I used to think a balanced budget amendment was a bad idea. Forcing the federal government to spend only what it took in, I believed, would hamper Washington’s ability to stimulate the economy during a downturn with a short burst of spending, or to nimbly respond to a threat to our security.
But I’m of a different mind after last week’s orgiastic spending by a Congress that clearly believes there are no limits to how high it can push the national debt.
The deplorable deal to keep the government open also erased any hope, in my view, that a Republican Congress and president will honor their party’s basic value of fiscal responsibility.
If spending can’t be contained when the GOP is in control, imagine how much more prolific it will be when the big-government Democrats return to power.
Although a few voices of protest were raised, most notably that of Kentucky Sen. Rand Paul, most of those who call themselves fiscal conservatives readily cast their votes to add nearly $400 billion to the budget deficit. And then they had the nerve to call it a victory.
For whom? I’d bet given their druthers, American taxpayers would overwhelmingly prefer a government shutdown over a massive spending spree. Congress doesn’t see any relationship between how much cash goes out and how much comes in. Just a few weeks after reducing revenues through a huge tax cut, lawmakers in a bipartisan vote raised annual spending limits by nearly $300 billion, and allocated another nearly $100 billion for disaster relief.
The larger deficits will lead to higher interest rates as the federal government competes with the private sector for credit dollars. Higher interest rates mean a lower stock market. And that means individual Americans get poorer.
If a balanced budget amendment were enacted through a Constitutional amendment, Congress would be forced to set spending priorities. If it wants this shiny new program, it will have to kill that dull old one. Or raise taxes.
That would be a useful lesson for American taxpayers, too. They can ask Washington to solve all their problems, but they’ll have to pay the tab. We can’t keep demanding a European-style welfare state without accepting European-style tax rates.
Pay-as-you go would keep Congress focused on its essential duties. It would force a real debate, for example, of whether a federal education department is needed when taxpayers are already funding schools with state and local taxes. Or whether the Homeland Security Department is duplicating the functions of local police agencies. Or whether we should finally kill the scores of ineffective federal job training programs.
We’ve managed to avoid those decisions because whenever Congress and a president want to expand the bureaucracy, they write a cold check for future generations to cover.
To put the $20 trillion national debt into perspective, it amounts to roughly $65,000 for every man, woman and child in America. That’s more than double the median per capita income.
There’s only one way to stop this: Tear up the national credit card.
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