7 for 7 against 1

With unemployment over 9 percent nationally, the economists’ thoughts are worth noting — particularly with regard to the impact of restrictions on responses to economic downturns.

Mike Owen
Mike Owen

Seven leading economists offer seven reasons that a constitutional balanced budget amendment is one bad idea for the economy.

With unemployment over 9 percent nationally and 6 percent in Iowa, and various proposals for an amendment with severe restrictions being offered — one of them passing the House on Tuesday, July 19 — the economists’ thoughts are worth noting. In summary, they are:

Reason No. 1: It’s bad for economic recovery, requiring spending cuts that would aggravate recessions.
Reason No. 2: Borrowing to invest in the nation’s needs would be banned.
Reason No. 3: Pinched by restrictions, Congress would use gimmicks or shift responsibilities to states, localities and private businesses.
Reason No. 4: Supermajority requirements are undemocratic and are recipes for gridlock.
Reason No. 5: Binding caps on spending limit Congress’ ability to fight recessions.
Reason No. 6: An amendment is not necessary; Congress has the authority to pass balanced budgets.
Reason No. 7: Imposing such restrictions quickly would damage an already-weak recovery.

For more explanation in their own words, see the economists’ letter to the President and party leaders in both houses of Congress.

Posted by Mike Owen, Assistant Director

Author: iowapolicypoints

Iowa Policy Points is a blog of Common Good Iowa, a new organization built on a collective 50 years of experience of two respected Iowa organizations — the Child and Family Policy Center and the Iowa Policy Project. Learn more at www.commongoodiowa.org.

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