The majority of Americans get it. Deficit spending is irresponsible. It expands the size and scope of governmental power and does not bring economic recovery. In fact, according to a July 2011 poll, 74 percent of Americans favor a balanced budget amendment to the U.S. Constitution—similar to what 49 of the 50 states face.
However, statist organizations such as the Center for Budget and Policy Priorities continue to promote the “perils” of spending within one’s means. Apparently, a balanced budget, as Republican presidential candidate Ron Paul has proposed, would bring “catastrophic” results. A $1.5 trillion cut in fiscal year 2011, says Jared Bernstein of CBPP, “would have thrown 15 million more people out of work and virtually doubled the unemployment rate.”
“Those sound like crazy numbers,” he continues.
That’s because they are. And all the promises of deficit driven stimuli (concealed inflation taxes) have come to worse-than-nought in terms of any reduction to unemployment numbers. The results, compared to the claims, speak for themselves.
The post-World War II scenario provides a fitting counter-example to these fears. Despite a dramatic cut in spending at that time, even going into surplus, civilian production expanded rapidly. And after the return from war of 10 million men, unemployment did not surpass 4 percent until 1949.
Yes, states can do it without negative impact, and so can the federal government—even if a balanced budget amendment is necessary to make it happen.