Proposition Twenty – an intervention for debtaholics
With Proposition 20 in effect, Congress would be faced with the choice of reducing federal expenditures without raising and spending more tax revenues; else selling off federal assets, another salutary result; or persuading the Fed to increase the value of the dollar.
By John McClaughry at American Thinker
EXCERPTS:
The federal government’s gross federal debt (debt held by the public plus intragovernmental obligations) will blow past $15 trillion by the end of September. That will just surpass 100% of projected GDP, a level seen in our history only at the end of World War II.
At some point during this timeframe, there will be a congressional agreement to increase the debt limit. This poses no problem for Democrats, although Sen. Barack Obama did vote against a debt limit increase in 2006.
On March 31, all 47 Senate Republicans endorsed S.J. Res. 10, known as the Consensus Balanced Budget Amendment. Like many of its predecessor proposals, the new CBBA requires that outlays cannot exceed receipts in a given budget year unless two-thirds of the House and Senate membership approve.
Other than as a political rallying cry, it’s hard to see any real prospect of such an amendment effectively restraining federal spending or taxation. The terms “outlays,” “revenues,” and “gross domestic product” offer opportunities for creative accounting; there is no enforcement mechanism other than, presumably, in courts facing shutdown for lack of deficit financing.
There is, however, an anti-debt amendment available that will clearly stop deficit spending except in time of war. It was proposed in 1987 under the name “Proposition 2½,” after the tax limitation measure approved in Massachusetts in 1980, because it would have set a then-unimaginable two and a half trillion dollars as the national debt limit. Its modern version is dubbed “Proposition 20” and reads as follows:
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