Monday, August 08, 2011

The Republican Governing-Class' Magic Trick: BBA

I am not now, nor ever have been, a "balanced budget amendment" enthusiast.  A BBA, nice as it sounds, is not a substitute for actual adulthood in Congress.  That, of course, is the point:  the 'conservatives' and RINOs in Congress would prefer not to be adults, thankyouverymuch.  They just want to be re-elected and live handsomely. 

They are, after all, the Ruling Class.

Turns out there are others who aren't in love with BBA, either, and they are NOT Democrat big-spenders.

What, then, would Hamilton think about the balanced budget amendment? I think it is fair to say, on the basis of the Report on Public Credit, that he would not have approved of it.

...Hamilton’s argument, then, does not point to a continually growing public debt. Indeed, he warns that a nation that finds itself more and more in debt over time will be imperiling the pubic credit and thus, by inviting higher interest rates, impairing the nation’s ability to borrow advantageously when genuine necessities arise.

Yah........all we need is a really major war (a genuine necessity) to demonstrate that H. was right.

Hamilton begins with the understanding that "exigencies" requiring borrowing WILL arise like black swans.

To this, the proponents of the balanced budget amendment might respond that it can be crafted in such a way as to allow for public borrowing in cases of war or crisis. As a matter of fact, such an exception is currently being discussed as part of any balanced budget amendment. Such an exception, however, would not solve the problem. Depending on how it were framed, it would accomplish either too much or too little. 

Not hard to find precedent, either.  Gramm-Rudman is routinely bypassed by Congressional "emergency" declarations (who would have thought?).  OTOH, limiting BBA borrowing to "wars" means there could be no borrowing for disasters like Katrina.

Whelan, in the NRO 'graf linking the above essay, brings up an even more gut-twistingly frightening possibility:  that some damn Federal district judge, or SCOTUS, will determine borrowing/spending/taxation questions.  Talk about zombie economics!

The "conservatives" are doing exactly what the Party In Government has done for years.  They're pretending that the BBA will "fix" the problem and hoping you'll vote for them because, after all, they would "fix" the problem.

But the BBA will not fix the problem.  

However, it WILL give the Ruling Class (or the Party In Government) another lease on its cancerous, leeching, life.

Is that what you really want?

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