Please correct my thinking here if it is wrong.
A “Balanced Budget amendment” that originates with the States under Article V is great and I fully support that effort.
That effort if successful would in effect, limit the Federal Governments growth by restricting their “operating budget”.
Here’s where I may be having some trouble.
Tax dollars collected by the Feds are, for the most part, placed into a “General fund”. Then allocated to various Departments based on their budget and budget requests.
These “Departments” are clearly an increasing Government bureaucracy but don’t they “Pass Through” a boat load of money to the States ?
Don’t they give the States money if those States adopt the mandates that are generated from this growing bureaucracy?
I understand “Funded vs. Unfunded” Mandates.
Back in the day, there were states that were threatened by the Feds that if they didn’t adopt a “55 MPH” speed limit their “Highway funds” would be cut off.
I’m certain that the same or similar things are happening with any number of Federal Government agencies.
IMHO, any effective measure to force the feds into a balanced budget will lead to an increase in taxes.
I think a better approach may be the complete opposite of the attempt to starve the Feds of money, but to flood them with money instead. These departments spend most of their time looking for ways to increase their budgets by expanding the number of ways they can hand out money.
The States need to “Just say NO” to both the mandates and the money.
Maybe it will take article V for this to happen, I don’t know.
From my understanding, however, is if a federal department fails to spend the money allocated to them, then their budget gets cut.
You could always enter the Cut, Cap and Balance Amendment touted by Mark Levin, which would make it more difficult to Congress to balance the budget by raising taxes.
If you possess a fiat money system, that debt is your money supply. In a fiat money system, you must keep inflating that debt to survive. If you decrease the money supply, you set off deflation, and you'll collapse the system the way it almost went down in 2008. This is why even "conservative" administrations support increased entitlements, and this is why we have endless war.
If we paid off the national debt, your money, in the form of the bits and bytes in your bank accounts, would disappear. Federal Reserve Notes would become worthless. The money supply, which is based on debt, would dry up.
We're gotten away with all this foolishness because we control the world's reserve currency, and we have the military means to make sure the rest of the world puts up with our malfeasance. The dollar is the only pool of capital in the world deep enough to handle trillions of dollars of transactions every day. As John Connally, Nixon's Treasury Secretary, put it in 1971 when we closed the gold window to foreign payments, "They're our deficits, but they're your problem." This is what permits us to experience that heady sense of instant gratification that has so ruined our national sense of morality.
If we were back on the gold standard, we wouldn't need a balanced budget amendment because the gold standard itself enforces an iron discipline.
Simply put, I see this as a misguided cause.
But here is where it may become useful. When cooler heads prevail, I doubt an Amendments Convention dedicated to a balanced budget amendment would produce an amendment. In other words, it would adjourn without doing anything.
But one good thing would come out of it. We would have all our rules and precedents in place for future conventions. Further, we would have survived an Amendments Convention without a runaway convention or dangerous amendment proposals coming out of it. The people would have greater confidence in the process. Congress and the political parties would be on notice that the states and the people have found a way around them.
It's the second Amendments Convention, dedicated to overhauling the relationship between the states and the federal government, that would be the big one.