Give up on the BBA, Mr. Richardson

August 4, 2007

Occasionally, presidential candidates are going to embrace bad, unpopular ideas. That’s to be expected, I suppose; no candidate is going to get every issue exactly right.

But Bill Richardson’s support for a Balanced Budget Amendment is just bizarre. He not only supports a bad policy, but he brags about it, as if he assumes others are going to agree with him.

Apparently, the New Mexico governor touted his BBA policy at YearlyKos this afternoon.

Oh, man. Bill Richardson just repeated his call for a Balanced Budget Amendment to the constitution. The audience, showing what I think is a pretty impressive level of knowledge of budget policy, erupted in boos. And rightly so. This is a terrible idea. Fortunately, Richardson’s not going to be president, but imagine if we’d had such a thing in place during, say, the second world war. I dunno what Richardson thinks he’s doing.

Richardson didn’t slip up and accidentally mention this today; he frequently plugs his support for a constitutional amendment on this on the stump, and emphasizes his position in interviews.

It’s hard to imagine what Richardson hopes to accomplish by endorsing such a remarkably bad idea. Occasionally, deficit spending is absolutely necessary to the health of the economy. Indeed, during a recession or a war, deficits are practically essential.

The BBA is a rather cheap gimmick and an awful policy, which is why the audience was less than receptive today. The sooner Richardson drops the proposal from his repertoire, the better.

It’s hard to imagine what Richardson hopes to accomplish by endorsing such a remarkably bad idea. — CB

I guess what’s motivating him is our current deficit, which is enough to scare anyone. All Dem candidates will have to think how they’ll deal with it. But having a total ban on deficit, ever, by enshrining it in the Constitution is not only a bad idea but a very near-sighted one.

Richardson isn’t too great on healthcare, either.

  • Maybe Richardson has become an adult since running New Mexico and finally understood the value in making the citizens pay for what they want in taxes rather then create debt for future generations. I think the federal gov’t is up to 9 trillion in debt and that doesn’t include future unfunded liabilities. Keep smoking whatever and dreaming but sooner or later you have to pay for this spending excess.

  • Ron, the issue is not the merit of having balanced budgets but the wisdom of making them mandatory. There are occasions–not even rare occasions–when deficit spending is the more responsible course.

    This fact is so obvious that most of the various proposed amendments contain clauses allowing a supermajority of Congress to approve unbalanced budgets. Which makes the whole idea a pointless gimmick favored only by political hacks and their more naive supporters.

  • Ratifying a Balanced Budget Amendment in today’s tax-phobic environment would be a lot like being seasick and having lockjaw at the same time.

  • Less than receptive? It was one of the few times the audience hissed and boo’d a candidates response.

  • The BBA is an idiotic idea. Once ratified, how do you enforce it? Unless it carried the death penalty (a randomly selected cabinet member and member of the House and Senate), there would be loopholes galore.

    Good governance, something we had in the 1990’s, should lead to surpluses that balance out sometimes necessary deficits. Richardson should focus on telling us how he would govern, which is something he actually might be good at.

  • I hadn’t even heard of the BBA before now…
    And, holy crap, I wouldn’t have believed it if I had!
    What a (crack-)pipe dream.

  • O.T. the political Blogs have completely missed the credit problems hitting the mortgage markets, LBO and soon to spread into auto and other sectors. Wells Fargo Friday is quoting 8% on non-conforming loans ( anything higher then GSE limits) this and the MBS crisis is creating widespread panic in the Hedge Fund industry and has frozen the secondary private mortgage business. Large layoffs and downsizing in anything related to Real Esate happening and will pick up speed in the coming months. Margin calls from over leveraged players in the market are causing good sell offs ( great if your short) and causing daily begging from big players for the FED to cut rates. J6P is getting a lifestyle margin call, I will be interested to see how it seeps into the political reality going forward.

  • What?? Exercise fiscal responsibility through higher taxes and trimming the federal budget?

    To help reduce deficit spending AND create a surplus?

    All without a Constitutional admendment???

    That’s just crazy talk. It would never work.

  • Using his NYT column in recent years, Paul Krugman has explain how Rubinomics and the balance budget obsession has been spectacularly bad and asinine, and thus, had a Bush-enabling, regressive effect on domestic policy. Richardson is “spectacularly” uninformed; good-bye Bill.

  • It’s hard to imagine what Richardson hopes to accomplish by endorsing such a remarkably bad idea. Occasionally, deficit spending is absolutely necessary to the health of the economy. Indeed, during a recession or a war, deficits are practically essential.

    I guess an easy way to explain it is by analogy to credit for individuals. I used to fear credits cards and claim I’d never get one, because I’d known or heard of too many people (and their horror-stories) who had over-relied on credits cards when they were young/just getting started. But I’ve gone so far into debt for school, and I would have had to put it off for so long if I was going to save up the money– there’s no way a person can have a decent standard of living in this country without going into debt, and probably even getting a credit card.

  • Then again, there’s a BBA, and then there’s balancing the budget. These are as different as a hare and a fish. I would certainly live without using credit if I could. Living without credit is healthy if it can be done- if you don’t need credit, then not relying on it keeps you from becoming a spendthrift (like we are now). Maybe someone should just explain the difference to Richardson so he can get on board, and then we can all look better for it.

  • -the BBA would never happen and Richardson knows that but if the bloggers/ citizens responded in a positive manner to the concept then he knows it has some depth of support.
    Clearly he understands after today that the Democratic Party has a low level of interest in balancing the budget and making that a priority issue in the campaigan.

  • ron said:

    “-the BBA would never happen and Richardson knows that but if the bloggers/ citizens responded in a positive manner to the concept then he knows it has some depth of support.
    Clearly he understands after today that the Democratic Party has a low level of interest in balancing the budget and making that a priority issue in the campaigan.”

    What?
    No, seriously, what the hell?
    Let me try to follow your logic:
    Because liberals don’t embrace a stupid pipe-dream solution to a real problem… this proves that they don’t believe there IS a problem?

    Yeah, ron, that’s EXACTLY it!

    Moron.

  • How about we have a mandatory balanced budget, but only under Republican presidents?

    I’m being facetious, but think about it: the Democrats have shown they can responsibly manage the country’s finances (at least if they have a hostile Congress to restrain them; I strongly doubt that, absent 1994, you would have had the Clinton surpluses). The Republicans have shown only the ability to defecate all over the the public ledger.

    Seriously, I would like someone to explain to me how, absent the “perfect” political circumstances (divided control), you ensure that government display fiscal responsibility. What I’ve always liked about the mandate of balanced budgets is that it theoretically forces choice: you can ensure a million more kids have health coverage, or buy an obsolete weapons system. Subsidies for agribusiness or transit system upgrades. The rules allowing deficits falsify all the choices. What you have are subsidies, weapons systems, and tax cuts for billionaires–but when it’s time to fix the friggin’ infrastructure or expand S-CHIP… sorry, there’s no money left, and we must be fiscally responsible. Howard Dean in his ’04 campaign talked about how you needed balanced budgets to achieve equity goals; I believe this is what he meant.

    The criticisms of the BBA here seem to be that “it’s naive.” I don’t know about that, but absolutely there should be grounds for exceptions–natural disasters, an attack on U.S. territory, etc. I’m just not sure how without some rules, you can force the choices and be fiscally prudent.

    I’m also curious as to whether folks who think it’s a terrible idea for the feds to have a mandated balanced budget feel that this is also true for the states.

  • Dajafi, although you clearly mean well, you’re not getting it. If there are no loopholes, we can’t respond appropriately in times of crisis. If there are loopholes, we might as well not have an amendment at all, because it’s never going to be honored. The BBA is total nonsense, a rattling of sabers.

    What we actually need is a commitment by both parties to responsible fiscal policy. Or, failing that–actually, preferably–an end to Republican control of anything of consequence.

  • Here’s Paul Krugman’s take on the budget deficits and the BBA.

    An Excerpt: As Brad DeLong … recently wrote …: “Rubin and us spearcarriers moved heaven and earth to restore fiscal balance to the American government in order to raise the rate of economic growth. But what we turned out to have done, in the end, was to enable George W. Bush’s right-wing class war: his push for greater after-tax income inequality.”

    My only quibble with Mr. DeLong’s characterization is that this wasn’t just one man’s class war: the whole conservative movement shared Mr. Bush’s squanderlust…

  • The BBA is a way of balancing the budget without saying you’ll raise taxes.

    Everyone likes the balancing idea, they just don’t like to face the required actions that would make it happen.

    Supporting the BBA is slightly less chicken spit than what the other candidates are ponying up for the cause of sound fiscal management: jack squat

    Alas, if only the BBA were courageous AND smart.

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