Another Reddit thread turned blog post, as someone asked how to think about Indiana’s proposed “balanced budget” amendment. You’ll be asked about it on your ballot and it’s not getting much attention. I agree with most commentators that it will likely pass because it sounds good and smart. But here’s my thought process in the context of the Reddit thread:
Libertarians like reigning in government, setting strong limits, and keeping the fiscal house in order. This amendment checks all the boxes.
Libertarians (and I suspect most people) also like smart, efficient government (or at least the idea of it) and treating constitutions like well-respected, protected texts. That doesn’t mean they can’t change, but the spirit of them from history is worth recognizing.
That said, Indiana already has debt-guidance in the 1851 Constitution. Like many states, our Internal Mammoth Improvements Act (mostly canals) bankrupted the state when the economy crashed.
We defaulted on payments in the late 1840s, raised taxes by as much as 3x or more, slashed services, and had no money except to pay interest. Come 1851 our forefathers said, “Never again”. They wrote in rules about how debt was to be used by the State. Some exceptions were to repel rebellion and invasion, for instance. General debt to float a shortfall or two was allowed, so long as it was temporary and we felt secure in knowing we could pay it based on revenues.
That is the sticking point House and Senate R’s today have latched on to. Nothing in the 1851 Constitution says the budget has to be balanced. It just says we have to be smarter about debt. R’s are right in saying the only thing that’s balanced our budgets is our current desire to always do so.
So now I ask: what is the worst case scenario with this new amendment? Really worst case: another civil war where slightly less than 2/3 of the House and Senate don’t agree that it’s a rebellion, we have no money, and we can’t repel the invaders. In other words, the South rises again, a bunch of our legislators think it’s fine and are sympathetic, and this amendment fails to garner the 2/3 Supermajority vote to do anything about it.
What is a more likely worst-case scenario? Another depression or recession where state projects and services are cut. Democrats fear this and say we should go into a bunch of debt for it, but they seem to forget states, unlike the feds, can’t just print money. We’re already bound by the limits of monetary reality anyway.
But we just had a recession, and many others before that, and came out fine. The 1851 language has worked for us for 150 years. Amending it for political points, which is what this seems like, seems unnecessary. And for that reason, I’m voting “no”. The Constitution isn’t a cocktail napkin you just get to add political buzzwords to so you feel better. Fiscal responsibility comes from making hard decisions and leadership, not forced amendments that may or may not come back to bite us in the ass in 100 years.
We already have limits on debt that have worked. If it’s not broken, don’t fix it.
Also for what it’s worth, I don’t like the idea of requiring “supermajorities” for things. That’s not the spirit of democracy. Thomas Jefferson didn’t run around requiring 2/3 of the Continental Congress to establish Independence. Lincoln didn’t run around Congress vying for 2/3 of the votes to free the slaves.