Families across the United States are dealing with the high cost of living.
Higher costs typically lead to more reliance on credit.
In fact, consumer debt is at a record high in the United States.
While families struggle to get by, Washington is spending more than ever, operating off an unmanageable deficit and skyrocketing national debt.
This government spending puts more money into the economy. The new money can lead to higher inflation.
Since politicians in D.C. spend more than the government takes in, they often resort to borrowing to cover the gap. That flood of new money chasing the same amount of goods or services in the market pushes prices higher.
An effective way to stop this would be a balanced budget amendment.
In general, federal spending would have to match revenues, ideally smoothed out over the medium term. This constitutional change would require the federal government to plan wisely, based on future revenue and expenses, just like responsible families and businesses.
This means Congress won’t have the green light to spend money without consequences.
Legislators must make tradeoffs and avoid relying on endless borrowing to cover overspending.
A BBA would enforce fiscal discipline by making it unconstitutional to run chronic deficits, although there are typically exceptions for emergencies.
What’s better is that almost every state in the country has this.
Take Indiana, for example.
Voters approved a constitutional balanced budget amendment in 2018 with 72% in favor. Ever since, the state has:
If we want to secure prosperity for future generations, Washington would be wise to model its budget after successful states like Indiana.
As it stands, Washington politicians are averse to seriously cutting spending. Even though our high debt weakens the U.S. dollar and stifles innovation and growth, budget cuts are typically unpopular.
A constitutional amendment is much harder to get around.
Congress would have to abide by it, even if it would rather keep spending. This means fixing its dysfunctions and issues so that government works for all Americans.
Politicians in Washington will have to spend within America’s means, which will benefit all Americans.
In FY 2024, roughly $892 billion, or 13% of the federal budget, was spent on the national debt’s interest payments alone, and it will likely be more this year.
The first step to fixing this problem was the passage of tax relief for working families, but spending cuts have to come next.
When you kick the can down the road, eventually the road ends.
Washington must learn to spend within its means if America is going to prosper in the long run.
Click here to learn more about a balanced budget amendment.
Click here to learn about why a balanced budget is good for the American economy.
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