You know how California is teetering on the brink of bankruptcy? Did you ever say to yourself “damn, I wish the federal government could be more like that”? Well, the authors of the new Contract From America apparently did since this is item three on their list of terrible ideas:
3. Demand a Balanced Budget
Begin the Constitutional amendment process to require a balanced budget with a two-thirds majority needed for any tax hike.
This means that every time the economy enters a downturn, the federal government is going to need to make sharp, immediate cuts in spending that deepen the downturn.
Note that while this probably will achieve its goal of reducing the overall level of government spending (as well as deepening recessions and making economic growth weaker) it will also lead to a massive spike in the array of inefficient budgetary gimmicks. Instead of trying to do whatever it is they want to do in a reasonable effective way, elected officials will spend lots of time and energy on trying to hide debt, on trying to reclassify taxes as something else (fees) and generally on obscuring the situation and making the underlying budgetary situation worse than it seems to be.