The virtues of an unbalanced budget amendment

posted by
August 8, 2011
Independent Institute
by Alex Tabarrok  
Posted in Commentary

"Like now, an unbalance budget amendment (unBBA) would allow the government to run a deficit during a recession. But unlike now, the unbalanced budget amendment would require the government to run a budget surplus in good times. So although unBBA allows for deficit spending on things like unemployment and food stamps during a recession, it would have similar effects to a balanced budget amendment over time because surpluses in good times would be spent in bad times. The surpluses, however, would come when we can most afford them, during a boom and the deficits would come when we most need them, during a recession." (08/04/11)  

Tags: ,

Our Sponsors