Congressman Bob Goodlatte --20-year Republican incumbent, and my presumed opponent next fall in the race for the congressional seat from Virginia's 6th District-- trumpets his
Balanced Budget Amendment as his big idea. It's a bad idea, offered in bad
Rep. Goodlatte's rules would mean inevitable cuts to Social Security and Medicare --programs seniors rely upon for security and dignity. The funds that have been built up over years in the Social Security Trust Fund, to provide for the retirement of baby boomers would become inaccessible to the program, according to organizations of retired workers and the Center for Budget and Policy Priorities.
Goodlatte's amendment would effectively lock in levels of taxation that shifted the tax burden from the superrich and the corporations onto the backs of middle class families.
His amendment would lead to cuts in programs that benefit average Americans, and lead to increases in taxes at state and local levels.
But isn't that worth it, if that's required for Fiscal Responsibility?
No. Not every strategy of financial discipline is smart. President Herbert Hoover's form of fiscal discipline made the Great Depression worse. Goodlatte's amendment would take us down the same sorry path.
Modern economics tells us that the smart way for the federal government to be fiscally responsible is to lean against the business cycle -- against the ups and downs of boom and bust. That means running a surplus during boom years, and running deficits during bust years, as illustrated by a story from the Bible.
In the Bible's book of Genesis, Pharaoh asks Joseph to interpret two puzzling dreams. In one, seven fat cattle are consumed by seven lean cattle; in the other, full grains are devoured by withered grains.
Joseph interprets the dreams as warning that Egypt will have seven years of bountiful crops, followed by seven years of drought and failed crops. Pharaoh should prepare, Joseph says, by taking a portion of the harvests during the fat years to fill the granaries. Then, during the years when famine is a danger, granaries can be emptied to feed the people.
That's also wise fiscal policy. During the fat years of robust economic growth, government should tax more and spend less, filling the Treasury and keeping the economy from over-heating. But during lean years -- like those we are in now-- government should spend more than it takes in so the economy will not starve.
Contrary to what Rep. Goodlatte and other Republicans say, the government should behave the opposite of everyone else. It should save while everyone else lives high. And when bad times lead everyone else to hunker down, sitting on their money, the government should spend. That breaks the vicious cycle of people losing jobs because no one is buying much of anything, which leads to people buying still less.
The problem is not that America is running deficits NOW. The REAL problem is that in the years of economic growth before the financial crisis, when we should have been running surpluses, the Republicans almost DOUBLED the national debt.
The Bush administration inherited budget surpluses from the Democrats, and then, with Vice President Cheney saying "Deficits don't matter," these Republicans waged two wars OFF THE BOOKS and instituted an expensive prescription drug benefit without funding it.
Rep. Goodlatte gave his full support to all that. And he supported massive tax cuts for the rich when we should have been filling the granaries to provide for harder times in the future.
Rep. Goodlatte's pet amendment is not just bad economics but bad faith as well.
If he really cared about closing the deficit, would he insist that revenues, which are at historic lows, play NO ROLE in closing the deficit? Would he be so adamant that those at the very top, whose share of the national wealth has tripled in recent years and whose tax burden has been decreasing, should pay not a cent in additional taxes? Would he have voted for the Ryan budget this year that would shift the cost of health care onto senior citizens in order to fund yet another tax cut for multi-millionaires and billionaires?