Unbalanced Budget Amendment
By Amit Singh | Sunday, August 14th, 2011 | Policy, PoliticsMost Republicans are pushing for a Balanced Budget Amendment as one of the ways to reign in spending, but without a corresponding monetary policy to support the amendment, the country will go into hyper-inflation. Unlike the 49 states that have a balanced budget amendment, none of them create their own currency, so they are forced to truly make difficult decisions and balance their budgets. However at the National level, the Treasury and Federal Reserve gives Congress an outlet to “balance” the budget by creating money out of thin air. The resulting bloat of the dollar supply in turn would feed hyper-inflation and cause a vicious downward spiral.
The new fiscal year is just 45 days away and the chances of passing a budget, much less a balanced one, is virtually zero. Instead of spending political capital on pushing a balanced budget amendment, the Republicans should push to reduce our military footprint around the world, specifically in Libya, Germany, Korea, Japan, Iraq and Afghanistan. Not only will bringing the troops back save many billions of dollars and enable our servicemen to spend their paychecks locally versus abroad, but it will also give the Republicans a negotiating stance with the Democrats to reduce entitlement programs in the upcoming budget battle.
In the meantime, precious metals such as gold and silver will continue to increase in value. I only wish I could use it to buy and sell items with.
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3 Responses to "Unbalanced Budget Amendment"
Amit,
Do you wish you could use gold and silver to buy things with? Or is it you wish paper money was backed by gold and silver?
Bringing the troops home is an excellent idea; as you noted: it would save billions and would inject billions into local economies throughout the US instead of abroad.
In the short run I don’t think a Balanced Budget Amendment would be good for Virginia. If I were a representative from the following 18 states I would fight to ensure that for every $1 paid my state received $1 back.
And it appears the following 18 states are subsidizing Virginia and the other 31 states. (How much they received for every $1 paid, how they voted in the 2010 Presidential Election):
California ($0.78, D)
Connecticut ($0.69, D)
Colorado ($0.81, D)
Delaware ($0.77, D)
Florida ($0.97, D)
Illinois ($0.75, D)
Massachusetts ($0.82 , D)
Minnesota ($0.72, D)
Michigan ($0.92, D)
New Hampshire ($0.71, D)
New Jersey ($0.61, D)
New York ($0.79, D)
Nevada ($0.65, D)
Oregon ($0.98, D)
Rhode Island ($1.00, D)
Texas ($0.94, R)
Washington ($0.88, D)
Wisconsin ($0.86, D)
If those Liberal states demanded equity in Federal Tax Dollars their individual state economies would be a lot more prosperous and the rest of us would be left out to dry.
http://visualizingeconomics.com/2010/02/17/federal-taxes-paidreceived-for-each-state/
ToR, yes paper backed with precious metals would be great but if someone does want to actually use gold and silver I think they should be able to. unfortunately not everyone does: http://www.courierpress.com/news/2007/nov/15/liberty-dollar-office-raided/
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