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There has been a general belief among many Americans that federal spending is careening out of control. This debt crisis has often led to calls for constitutional conventions to propose a Balanced Budget Amendment (Schick and LoStracco, 278). However, such proposals have never gained limelight due to political and economic reasons. Just recently, the so called ‘bad version’ of the Balanced Budget Amendment was turned down after four Republicans voted against it (DeHaven). This is a clear indication of the varying perceptions people have about the expected effects of this amendment.
In as much as America needs to control wasteful Federal spending, the inability to fully support the Balanced Budget Amendment should not be interpreted as a lack of enthusiasm for enacting spending reductions. It is necessary to consider the percentage of the budget deficit in comparison with the Gross Domestic Product which has remarkably decreased over the past 20 years, implying a fairly reasonable ability to handle debt (Kasich, 85).
While there is no guarantee that the amendment would yield positive fiscal outcomes, it seeks to balance the budget without paying attention to prevailing economic fluctuations. This effect would definitely put the country in a riskier situation during recessions when passing a vote to waive it would be untimely.
This Amendment would introduce a procedure that constraints government expenditure, a move that would presumably shrink the government sector and shift income (Boaz & Crane, 15). Total elimination of deficits would certainly have an impact on income distribution among employees of the government and the private sector with either side being the winners.
Nevertheless, a valid case can be made that individuals in the unionized industrial manufacturing sector are perpetual losers from a regimen of continuous deficit spending. This situation is caused by Government credit demands and high interest rates which increase the exchange value of the dollar, leaving local manufactures at a competitive disadvantage with workers overseas. Therefore, the amendment would not only be useful in controlling federal debt but also in increasing employment and wage rates for most Americans.
Allen Schick, Felix LoStracco. The federal budget: politics, policy, process. Brookings Institution Press, 2000. Print
David Boaz, Edward H. Crane. Beyond the status quo: policy proposals for America. Cato Institute, 1985. Print
John R. Kasich. Why the Balanced Budget Amendment Is Good for Americans: Hearing Before the Budget, U. S. House of Representatives. DIANE Publishing, Jun 1, 1998. Print
Tad DeHaven. Adios Balanced Budget Amendment. November 21st, 2011. Web.22 November 2011