In the United States, the Constitution must be formally amended in order for laws to be changed. The requirement of 75% state ratification and 67% representative ratification makes the US Constitution one of the most difficult ruling documents to alter. A balanced budget amendment already faces an uphill battle because of this. There are some other pros and cons to consider as well.
The Pros of a Balanced Budget Amendment
1. There would never be a worry about debt.
The amendment would require the government to always operate in a financially responsible way. The idea of having trillions of dollars of debt hanging over the heads of an entire population would go away.
2. It would allow for greater individual participation.
It is difficult to become excited about paying taxes when those taxes are being used for interest payments on large amounts of debt. When taxpayer money goes to services and programs which are needed, there is less hesitation to actually get involved with the government.
3. Excuses would be eliminated.
There is a lot of bi-partisan rancor where each party blames the other for the lack of a solid budget plan. With a balanced budget amendment, all of these excuses would go away because both parties would be legally required to create a budget that is balanced.
The Cons of a Balanced Budget Amendment
1. There would be less budget flexibility.
Under the current structure, services and programs are still funded even when costs exceed incoming tax money. With a balanced budget amendment, there would always be year-to-year uncertainty about funding because there would be no debt funding allowed whatsoever.
2. Defining a “fair share” payment would become even more difficult.
Should businesses pay more than individuals? Should wealthier individuals pay more than poor individuals? Defining how a fair share is paid becomes an even stickier situation because full participation in the tax code would become absolutely necessary.
3. It would encourage new taxes.
If a budget can’t be met with current revenues, the governments of the world have a history of increasing taxes to compensate. This could mean higher tax rates, more sales tax options, or new taxes on items like groceries, beverages, and other regularly used items.
A balanced budget amendment makes financial sense, but it may not make legal sense. By weighing all the pros and cons of such an amendment, it becomes possible to find what the right decision should be.
Crystal Lombardo is a contributing editor for Vision Launch. Crystal is a seasoned writer and researcher with over 10 years of experience. She has been an editor of three popular blogs that each have had over 500,000 monthly readers.