Gaining Ground in a Humpty Dumpty Economy
A tricky balance
At Aggregates Manager press time, U.S. Sen. John Cornyn (R-Texas) was calling on Congress to adopt “a strong balanced budget amendment (BBA) to the Constitution.” Cornyn, a member of the Senate Budget Committee, says a strong BBA “will treat the disease along with the symptoms. An amendment with too many exceptions and loopholes will not.”
In a speech before the Heritage Foundation, “Balanced Budget Amendment: Reclaiming Control Over America’s Future,” Cornyn asked the difference between the fiscal challenges the nation’s founders faced and the ones we currently face and then quipped that “the answer is pretty simple. Back then, federal government was the solution to the problem. Right now, the federal government is the cause of the problem. And the American people understand the difference.”
The U.S. government now borrows more than 40 cents of every dollar it spends, Cornyn noted, adding that “every child born in America today comes into the world as a debtor, to the tune of about $46,000. “Our gross debt is now larger than the entire U.S. economy, which means we are now on the same trajectory as Greece, Italy, and several other nations, and we do not like where that path leads,” he said. (To watch Sen. Cornyn’s speech, go to heritage.org/Events/2011/11/Balanced-Budget-Amendment.)
The question, however, is what form of BBA should be supported: A strong BBA that might not pass the House or a “clean BBA” that wouldn’t incorporate spending and taxing provisions, but might be enough to get the two-thirds supermajority vote?
Cornyn holds steadfastly to his support of a “strong bill” and cites two reasons. “First, a strong balanced budget amendment will actually solve the problem. Let’s all remember that the disease in Washington is out-of-control spending,” Cornyn said in his speech. “Big deficits are just a symptom of that disease. As any doctor will tell you, treating the symptoms without treating the underlying cause of those symptoms will likely do nothing to help the patient recover, and could make things worse.
“Second, a strong amendment will reassure financial markets and the American people that we get it. Think about the message that Standard and Poor’s sent us when they downgraded our credit rating (in 2011),” Cornyn added. “The financial markets are looking for a serious, long-term solution to our fiscal issues. They are not looking for more empty promises.” AM
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