Vermont does not have a balanced budget law.

I think states can get away with having balanced budget laws on the books that the federal government can't. A-No. 1 reason why is states don't have to pay for wars that might unexpectedly come up. But the feds use/abuse their ability to float debt way too much, for specious reasons. Oftentimes to pay off military contractors who fill campaign coffers.

Vermont does not have a balanced budget law.

 

They don't need it with all of that excellent maple syrup they've got.

As I said for the most part it has worked.

 

I do not follow. I pointed out that states have two budgets and only balance one so how has it worked for the most part?

 

In addition, states are using some budgetary tricks to inflate revenue in order to be allowed to spend more. CA did this not too long ago.

I'm all in support of a BBA, but I confess your idea piques my curiosity. Would you care to explain how this would look on paper?

 

From prior posts it sounds like mcpap's been listening to Hannity???? :scared:

I've read something similar except it said "economic output" instead of GDP.

 

What is economic output?

 

Doesn't the GDP constantly get revised?

 

If GDP is the basis we have to forecast what GDP is in order to determine spending? Again, what happens when this guess is incorrect?

 

Again, way too many unanswered questions to put this into law.

 

Most ideas at this point do have way too many unanswered questions but that hasn't stopped people in the past from pursuing an idea. See Obama Health Care. Shoot, Nancy P didn't know what was in it AFTER it was put into law, maybe not even then.

What happens if the budget expects a certain amount of revenue which then determines spending and then due to unforseen reasons the revenue collected is actually less?

If in 2012 you budget $3 trillion revenue and $3 in spending but revenue only comes in at $2.8 trillion then you start the following year $200 billion in the hole. You pay that $200 billion first. That means if revenue is projected at $3 trillion again for 2013 you only have $2.8 trillion to work with.

y

 

Myth.

 

States have two budgets: capital and operating. Operating is the one that has to be balanced. The capital does not so it's not truly a balanced budget. The federal budget is not broken down that way when it comes to a BBA.

 

True.........but does not the operating budget provide for any needed payment on the capital debt obligations not covered by other financing mechanisms? Much closer to a "balance budget" than the federal way of doing things.

If in 2012 you budget $3 trillion revenue and $3 in spending but revenue only comes in at $2.8 trillion then you start the following year $200 billion in the hole. You pay that $200 billion first. That means if revenue is projected at $3 trillion again for 2013 you only have $2.8 trillion to work with.

 

Golly woodsrider-seems like a simple plan and it would work! Imagine if the politicians thought like you. More people need to come off of the government teat. Period. We are adding folks to the rolls daily. Add to that the wars (wasn't Obama going to end those??) and cost of additional government spending for more and more people on the elderly health care system, and less people paying any income tax, and the answer becomes self-evident.

 

Of course, you balance the budget. Of course, situations come about (like wars) where you have to make changes for the short-term, but just as you suggest, then that has to be taken into account immediately the next budget, not just passed down to future generations. Horrible stewards we are.

Golly woodsrider-seems like a simple plan and it would work! Imagine if the politicians thought like you. More people need to come off of the government teat. Period. We are adding folks to the rolls daily. Add to that the wars (wasn't Obama going to end those??) and cost of additional government spending for more and more people on the elderly health care system, and less people paying any income tax, and the answer becomes self-evident.

 

Of course, you balance the budget. Of course, situations come about (like wars) where you have to make changes for the short-term, but just as you suggest, then that has to be taken into account immediately the next budget, not just passed down to future generations. Horrible stewards we are.

 

Is war the only allowance?

 

Do we decrease the subsequent budgets by the amount of the war expense?

Is war the only allowance?

 

Do we decrease the subsequent budgets by the amount of the war expense?

 

No-other catastrophe's like Katrina, etc. Yes we decrease subsequent budgets by the war expense until we are back to even or running a surplus. (Happened last in the Clinton Presidency.) Add to that, I would like to see our foreign aid to every other country investigated by a congressional panel, and cut, cut, cut and/or eliminated. No need to give the Pakistani's cash for example. Or Afghani's. You don't give money and goods and food to your sworn enemies that are hell bent on killing you or that have such corrupt governments that the aid never reaches it's intended purpose.

I have not been a fan of the balanced budget amendment in the past, but in light of what we have seen this year I think it is now necessary. Maybe not from a truly operational perspective, but it is necessary to show the world the US is serious about getting its budget/debt/deficit under control. A balanced budget amendment will restore confidence in US credit for the ratings agencies and world markets. Italy is in the midst of a huge debt crisis and agreeing to have a balanced budget going forward is one of the key factors in helping them through the crisis. The same is true in Spain. France is also being pushed to a balanced budget to avoid having their ratings dropped from AAA.

I definitely support a balanced budget amendment.

I wonder if any of the founding fathers even knew what a trillion was?

An honest question. Imagine we run a budget surplus to the tune of $400 billion. What happens to that excess money? Is it applied to the deficit or something else? I just wondered what the government did with the surplus money during the Clinton years.