There are certainly logical and practical LIMITS to that. (Eventually a high enough tax burden - given that there is more and more international tax competition these days - would surely collapse the economy and thus *reduce* revenues to the government.)
Taxing or borrowing takes the money out of the private sector. The absolute limits of all tax, or tax and borrow, based spending are probably similar.
Taxing tends to create more distortion (if only because the tax system is so complex and even intentionally distorting, maybe not with a simple system), but borrowing past a certain amount creates more problem with paying back the interest.
I suppose with growing tax competition, and with the level of international capital flows (so the borrowed money doesn't have to be taken from the US itself), you might have a bit of a case, but we may be reaching limits on that. All the borrowing and deficits have contributed to the falling value of the dollar, and loans in the US, from both the US and international sources, are becoming less available.
Re: "... or you find creative ways around the restrictions,"
SUCH AS????????
Such as? You haven't seen the way the government already does this? And with greater incentives you could get something like Enron type accounting structures except with trillions not billions.
If you want to control spending with a constitutional amendment, how about the idea of an amendment to limit growth of spending per year, or to limit real per capita spending (either its growth or in an absolute sense), or to limit the government spending as a percentage of GDP (or other national production or income measure).
But while there is a certain level of appeal in such ideas, I'd have to be against them. I don't think government finances should generally be controlled by constitutional amendment. As much as I want them controlled there is the need for some flexibility in certain situations. You could allow exceptions (war, declared national emergency etc.), but then you increase the incentive to declare such exceptions. Also if you base the spending caps based on economic stats you increase the incentive to distort those economic stats.
We are SUPPOSED to be a nation ruled by LAW... and, our HIGHEST LAW (& most difficult to alter or 'get around') is the US Constitution.
We are, but law isn't very effective if it gets sufficiently unpopular. (and in some cases sufficiently doesn't have to be all that extreme of level). I wouldn't say that its lost all meaning, but we've already had the constitution's meaning distorted to a very great degree, and there is no reason to think that under these circumstances it might not be distorted even more.
Our highest law has some meaning, and can be useful, but its limited. We have rule of law, but no rule of law in the real world can be totally divorced from the opinions and passions of man. The law is made, interpreted, enforced, and obeyed (or not obeyed) by real people, not perfect paragons of justice.
Which is not to say that an amendment against deficits would have no effect, or even just a tiny effect, but you probably would have some (even if less) spending that exceeds government revenue.
"Less" in this context can still be a pretty big incentive for such an amendment, and I think reasonable people could support it, even if they know it will not be perfect at eliminating deficits. But I am reluctant to decide the budget limits by constitutional amendment, and I think that sometimes deficits are not bad. If I thought it would really lower spending to a great degree (and not just deficits) than I might overcome my reluctance, but I don't think it will. |
