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Following up on the Just Vote No Blog previous articles on profligate spending by the U.S. Congress, and on the “solution” of a Balanced Budget Amendment, here is an update.

On March 23, 2018, Congress passed the “Omnibus Bill,” a budget plan to allow the federal government to continue “functioning” until September 30, 2018. The bill totals $1.3 trillion, and adds about $1 trillion to the already gargantuan U.S. budget of around $4 trillion. How could the cost of running the country increase by $1.3 trillion? Easy. Legislators need to say they “did something” about everything that happened during the previous year, so they provide for a myriad of new funding. Roughly, the 2018 budget calls for $695 billion in defense spending and $591 billion in non-defense spending. Here are a few highlights of the 2,232-page bill:

* School shootings: $2.3 billion in new funding for mental health, training, and school safety programs at the Departments of Justice, Education, and Health and Human Services.

* People overdosing from opiods: $4 billion in treatment, prevention, and law enforcement efforts.

* Potholes: $21 billion for infrastructure projects across the country, including transportation, energy, water, and “cyber.”

* Porous borders: $47.8 billion for the Department of Homeland Security to bolster border infrastructure, add more “boots on the ground,” increase detention space, and improve surveillance technology.

* Waning hegemony: $654.6 billion in both base and Global War on Terror/Overseas Contingency Operations funding.

“The Definition of Audacity”

Surely it is known to all members of Congress that a constantly growing national debt now standing at around $21 trillion is not sustainable. Surely they know that at some point voters might catch on that the Ponzi Scheme could cause the nation’s economic collapse. Therefore, after voting for yet more spending by passing the Omnibus Bill, legislators felt they must “do something.” Four days after House Representative Robert W. Goodlette voted “Yes” on the Omnibus Bill, he introduced the Balanced Budget Amendment (BBA).

House Representative Thomas Massie (R-Ky) said the BBA proposal was the definition of “audacity.” “It’s got a loophole you can drive a truck through.” The provision to which Representative Massie refers says that if three-fifths (60%) of both the House and Senate vote to waive the amendment, they can pass an unbalanced budget. Well, the 2018 unbalanced budget was passed by 60% of House members and 65% of Senate members. Tell us how a BBA would have prevented the 2018 $1 billion increase to the U.S. budget.

Thankfully, the BBA was too audacious even for Congress members, and it was voted down.

Are State Legislators So Different?

State legislators claim U.S. legislators need to be reigned in because they are growing the federal government and spending too much. Therefore, they also need to do something: A Convention of States under Article V of the U.S. Constitution to propose a balanced budget amendment among other things.

Do you trust your state’s proposal to amend the Constitution of the United States any more than you should trust the U.S. Congress’ “definition of audacity?”

Today’s U.S. federal debt is around $21 trillion, $64,724 for every man, woman, and child in the country., and growing every second. So, who cares, you say, as long as domestic production is so wonderful. That is what the experts tell you. What they don’t tell you is that you are paying for that debt in one way or another, by way of taxes, foregone services, or risk. Also they don’t tell you that at some point the folks who have been lending the U.S. all that money will get spooked at the size of the debt and bail out.

How did we get to owe $21 trillion to individuals, foreign countries, and even our own Federal Reserve Bank? Because we elect our representatives based on the largess they promise to deliver. We make sure we get subsidized healthcare, education, housing, food, childcare. We want security.

Trends in Spending and Deficits

* The Congressional Budget Office says that in 2016, the federal government took in $3.3 trillion in revenues, and spent $3.9 trillion. The difference between revenues and expenditures is the federal deficit.

* 2007 – 2017 Spending and Deficits:

Quick Review of Borrowing: 

When job pays you less than you spend, you borrow from credit card companies, banks, credit unions, family, or friends. The federal government does the same thing – it borrows when it spends more than it earns. Here is a picture of the federal steadily-growing debt 2007 – 2017, showing debt in December 2017 at $21 trillion.

There are two main debt categories: Intra-government holdings (in 2017, this was $5.6 trillion borrowed from 230 government agencies; $2.801 trillion of which borrowed from Social Security), and debt held by the public (in 2017, $14.7 trillion borrowed from foreign countries, the Federal Reserve, mutual funds, state and local governments pension funds, private pension funds, banks, insurance companies, the general public, and other entities).

If the U.S. finds it owes so much money, and has to pay so much interest that there is little money left for any federal operations at all, then the country will have to either stop spending, raise taxes to astronomical levels, or default. If default had happened in 2017, guess who would be left holding the biggest bag? Look at foreign vs. domestic debt:

Foreign borrowers lent the U.S. federal government $6.004 trillion. Domestic borrowers, mostly folks contributing or receiving retirement money, lent $8.696 trillion.

How about the “Debt doesn’t matter” Argument?

Experts like Paul Krugman and Robert Reich used to tell us that debt does not matter since GDP made the country grow, debt or no debt. However, they seem to be clarifying their stance these days.

“Today’s debt is about 77 percent of our total national product. The reason it’s a problem is it’s growing faster than the economy is growing, so it’s on the way to becoming larger and larger in proportion.” Robert Reich

“What changes once we’re close to full employment? Basically, government borrowing once again competes with the private sector for a limited amount of money. This means that deficit spending no longer provides much if any economic boost, because it drives up interest rates and “crowds out” private investment.” Paul Krugman

It is difficult to tell whether these two gentlemen, champions of progressive politics, suddenly saw the light or they saw a Republican administration in Washington DC.

GDP is not supporting the debt, so what to do?

The U.S. debt-to-GDP ratio on December 29, 2017, was 104%: $20.493 trillion debt divided by $19.739 trillion GDP.

We could print more dollars to keep up with the debt and hope our creditors don’t mind their increasingly worthless investment.  We could hope we will be dead by the time the Ponzi scheme collapses.  Alternatively, we could bite the bullet and start fixing the mess by cutting spending and not giving tax cuts to billionaires.

We could start the spending cuts by bring our defense spending in line with everybody else in the world.

Certain ideas so defy logic that it is difficult to determine whether proponents aim to make suckers out of the unsuspecting or are being made suckers themselves. Such is the case with the currently proposed Article V Convention, under which states would gather to propose amendments to the U.S. Constitution.  Proponents either intentionally or credulously are placing the very nature of our Republic in peril. Therefore, as W.C. Fields would ask, why give suckers an even break?

What is an Article V Convention?

The Founding Fathers built into the U.S. Constitution many protections against federal government overreach. One such protection is Article V, which says,

The Congress, whenever two thirds of both houses shall deem it necessary, shall propose amendments to this Constitution, or, on the application of the legislatures of two thirds of the several states, shall call a convention for proposing amendments, which, in either case, shall be valid to all intents and purposes, as part of this Constitution, when ratified by the legislatures of three fourths of the several states, or by conventions in three fourths thereof, as the one or the other mode of ratification may be proposed by the Congress; provided that no amendment which may be made prior to the year one thousand eight hundred and eight shall in any manner affect the first and fourth clauses in the ninth section of the first article; and that no state, without its consent, shall be deprived of its equal suffrage in the Senate.

Under this Article, states, with or without Congress’ consensus, can call a convention of states to propose amendments to the Constitution. Once such amendments are ratified by the legislatures or by conventions of three fourths of the states, the amendments become part of the constitution.

Who is interested in Article V these days?

* There are currently 28 states with active applications for an Article V Convention. Eight applications were submitted in 2017, and eight in 2016. Twelve were submitted in prior years.

* Most applications so far call for a balanced budget, restraining of the federal government, and overturning of the U.S. Supreme Court Decision on Citizens United vs. Federal Elections Commission. Conservative states support the first two subjects, and progressive states the third. Within both factions, there is opposition. Conservative Eagle Forum and liberal Common Cause have expressed deep concerns.

* Proponent money is coming from prominent groups, such as the American Legislative Exchange Council and the WolfPAC.

Where do the Suckers Come In?

* Article V only says that Congress must call a convention when a certain number of states apply, and proposed amendments become part of the Constitution once a certain number of states ratify.  Details, whether they abide by the intentions of the Founders or not, are left to the states.  Where does it say the convention needs to be limited to a specific subject? Interestingly, applications are somewhat vague. Reining in the federal government could mean anything. It could mean getting rid of the 2nd Amendment or of Roe vs Wade. For example, Hawaii’s application only requests Congress to “convene a limited national convention under article V for the exclusive purpose of proposing an amendment to the United States Constitution that will limit the influence of money in our electoral process.” Any money? A certain amount of money indexed for inflation?

* The U.S. National Debt is around $20 trillion. Debt to Gross National Product is 104%, and the tipping point (when a country is in peril of default) is 77% according to the World Bank. Pretty soon we will all be working and paying taxes just to pay interest on the debt. So, yes, a balanced budget amendment would be great – if folks at the convention agreed to cut the military budget, Social Security, Medicare, and other major federal entitlements and expenditures in half, and double the taxation rate, either all at once or over the next 15 years.

Then there is the ratification process. Red state legislators would be thrown out of office if they touched any entitlements or perhaps came back without “clarifying” the 2nd Amendment. Blue states legislators would have to find new jobs if they expected significant cuts to the military or to Social Security.

How about the manner in which the ratification process would take place? Where is the requirement that ratification needs to be by one state one vote, as proponents claim?

The Alternatives

If states are truly concerned about federal fiscal mismanagement, they could incentivize candidates for federal office from their state to come to Washington prepared to cut spending significantly or lose their state’s support. They could encourage voters within their state to elect or re-elect only candidates who truly desire a balanced federal budget. If states are truly concerned about Citizens United vs. the FEC they could simply limit campaign contributions across the board within their states, including contributions from unions.

If none of these alternatives are happening now, why would we be made to believe they would miraculously happen in the context of an Article V Convention? Defies logic.