Regarding balanced budgets, since US dollar is the reserve currency of the world, the US needs to supply liquidity, in USD, to the world. No USD liquidity, and world trade will suffer/halt.
Via Federal Reserve rules, the USD is loaned into existence. The USD is a “note” (Federal Reserve Note) - a debt instrument.
If the debt is paid off, and the budget is balanced, then there will be no USD anymore - crazy huh!
So under the existing system, the system will likely collapse when the national debt is paid off.
This means to me that if there is a balanced budget amendment, then the rules about how the USD is created need to be changed as well.
I’ve never heard this before. Are you saying that the world economy would crash if we balanced the budget and payed off the debt? And can’t we loan money and not go into debt to do it?