Wednesday, January 12, 2011

House GOP readies push for balanced budget amendment

Here it comes...the Doomsday Amendment!

They tried this in 1995 and it missed by a single vote. This time it's likely to go through because of the rampant, deficit reduction dogma that has gripped the electorate. A lot of newly-elected, deficit hating "true believers" now reside in Congress and my guess is, they're gonna make this happen.

This amendment will cause an explosion in poverty in the United States like nothing we've ever seen before. With the quantity of money essentially fixed (same concept as a gold standard), growth will stagnate for good and the gap between rich and poor will surge. The streets will become a dangerous place.

The lawmakers who are pushing this, along with most of the electorate, are deeply ignorant when it comes to this subject. But that's not stopping them...they're moving forward with a zeal that looks shockingly similar to some type of religious fanaticism. Fundamental extremism, like Muslim terrorists. Only, they are the Deficit Terrorists.


Matt Franko said...


After this, all we would need is an S&P downgrade of US govt debt!

mike norman said...


That's coming, but it's likely to be Moody's that makes the first move. Seems like they're itchin' to do it.

Mike Sandifer said...

Well said Mike.

Correct me if I'm wrong, but my perception is that there's no entity of any kind more solvent than the US government.

Tom Hickey said...

Gonna pay for the wars off budget?

They should channel the ghost of Richard Nixon on this one or get set to pull back to Fortress America.

welfarewarfare state said...

Glad to see you back Mike.

A commodity money is not "essentially fixed." If gold and silver are monies and people demand more money holdings then the price of money will rise (prices will fall) which will encourage market actors to invest more in and ramp up mining for the commodity. It is self-correcting.

The Senate will never pass this amendment; and if by some miracle they did, the president would veto it anyway. It's just not going to happen.

What I suspect will happen is that the debt ceiling will be raised. The new Tea party House members will be promised by the GOP establishemnt that if they extend the debt ceiling this one time that new rules will be put in place that will be stringently enforced. That ,of course, is not going to happen. We are still heading for that cliff at breakneck speed.

Matt Franko said...


In your opinion, can they even achieve this if the non-govt sector has positive savings desires, and the banks are broken down and cant net issue more credit, and we still run a negative balance of trade?

Doesnt look possible (balanced budget) to me under these conditions.... simply cant be done.


mike norman said...


If wages fall far enough our trade position likely goes to surplus. That's their goal anyway...eliminate the "twin deficits."

Matt Franko said...

Thanks Mike.

Ryan Harris said...

Is this a political stunt, like the repeal of healthcare, or does it have a chance of passing the senate democrats? I can't find any polls on politico or anywhere.

Matt Franko said...


Check "The Hill"


has a story about this, fyi

googleheim said...



Jim Baird said...

Mike S.:

"Solvency" does not really apply to the U.S. gov., or any sovereign currency issuer. They neither "have"
nor "don't have" their currency of issue at any given time, so they cannot become "insolvent".


Presidents cannot veto proposed amendments. They must first be passed by a 2/3 vote in both houses, and if they are they go to the states for ratification. with 3/4 of the states. They never go to the president for signature.

welfarewarfare state said...


You are right. I'm thinking of bills.

Ryan Harris said...

These are the good intentions that our grandparents warned us about. The ones that pave the road to hell.

Ugh said...

Am I to suppose the "Stand with Senator Mike Lee and Support the Balanced Budget Amendment" advertisement is a parody? What the ??? I'm supposed to take what you say seriously when you accept money from those diametrically opposed to your beliefs?

Robert Owens said...

"After this, all we would need is an S&P downgrade of US govt debt!"

What would be the effect of S&P or Moody's downgrading US gov't debt? Wouldn't the Fed buy the bonds at whatever level/price/rate to assure that interest rate is maintained at their desired target?