Question

What are the advantages and disadvantages of a balanced federal budget? Should we pass a constitutional amendment to do so? Why or why not?

Answer 1

----> Every nation wants to have a balanced budget to maintain its credibility. Economists have mixed views on maintaining balanced budget. Some say it will have detrimental effect on the future generations, while some others say that there is no need to worry about high government debts. Advantages of maintaining balanced budget are:-- first it enhances the credibility of the government whether it can pay its debts or not. Second, Better credit ratings also reduces interest rates which inturn reduces fiscal burden. Disadvantages are:-- balanced budget is difficult to enforce, it will worsen situations like recession, emergency as maintaining balanced budget is restrictive in nature. So keeping advantages in mind,it's better that there is no constitutional compulsion on the government to enforce balanced budget because remedy should not be worse than the disease.