Sen. Cornyn’s Floor Speech on his Balanced Budget Amendment 11-17-10

Steve Brawner in his article “Safer roads and balanced budgets,” Arkansas News Bureau, April 13, 2011, noted:

The disagreement is over the solutions — on what spending to cut; what taxes to raise (basically none ever, according to Boozman); whether or not to enact a balanced budget amendment (Boozman says yes; Pryor no); and on what policies would promote the kind of economic growth that would make this a little easier.

Dan Mitchell wrote a great article called “Why a Tax Limitation/Balanced Budget Amendment is Needed to Control Spending,” Cato Institute, Feb 19, 1997. I will be posted portions of that article the next few days. Here is the second portion:

What Can a Tax Limitation/Balanced Budget Amendment Accomplish?

The obvious purpose of a tax limitation/balanced budget amendment is to prohibit politicians from engaging in deficit spending except in unusual circumstances, such as war. Government spending hinders the economy’s performance by transferring resources from the productive sector to the government. This is true whether government spending is financed by taxes or by borrowing. A balanced budget amendment, by making it more difficult to use borrowing as a way to raise revenue, should slow the growth of government.

In order to maximize the possible economic benefits of a balanced budget amendment, however, politicians will need to include a strong tax limitation provision such as a supermajority requirement. By making it as difficult for politicians to raise revenue by increasing taxes as it will be to raise revenue by issuing debt, the tax limitation/balanced budget amendment will help ensure that the end result is smaller government and more freedom for Americans.