I Like Silly Acronyms
Published on February 16, 2006 By Danny Bassette In Politics
       Now I'm not an economics expert, but it seems to me that owing large piles of money is generally a bad thing. For individuals, busineses, and yes, governments too. So one of the most basic obligations of any government would be to balance it's own budget (or have a surplus, that would be fine too). From what I can gather the national government doesn't do this, and my local government isn't much better. So I've been thinking about how to encouraging the budget to be balanced.
       My first idea was that if the budget isn't balanced (or on time, NY tends to have budgets come out months late) then the politicians don't get paid. No balance, no salary. Likely just a drop in the bucket, but it might encourage them. But that might also make them more easily influenced by other sources of money. After all, just because they aren't being paid doesn't mean they don't have expenses of their own. So bad idea since it seems too easy to cause even more corruption.
       Which got me thinking, we've got some people that have held the same office longer then I've been alive. Maybe an exaggeration, since I can't find any numbers to support this. Instead of going after their pay, go after their job. Any year where their is both a budget deficit and a debt, all elected officials become inelegible for reelection. They would sill finish out their term as usual, but then they can't run at the next one.
       So long as their is a debt the budget would have to stay positive if they want to keep their jobs. If their isn't a debt then their could be a budget deficit, but probably not for very many years. This would lead to either more people being in government (as the previous batch becomes inelegible for reelection) or a balanced budget (as those in office do their job). Either way sounds good to me.
       Of course, it will never happen. But I can dream, can't I?

Comments
on Feb 16, 2006
For businesses, debt sounds bad. But, it is usually has the cheapest cost of capital available(due to the tax writeoff). Also, mortgages for people lets you spread the cost of the house over a longer period of time. But, having 3 or 4 mortgages would probably be a bad thing. A horrendous amount of debt is bad. There is a balance, just like with everything else.

Of course, government doesn't have a tax write off. So why the government feels that even more debt than it's in is a good thing is beyond me. Some debt helps the economy, too much and taxes go up or they default, which would kill it.
on Feb 16, 2006

For businesses, debt sounds bad. But, it is usually has the cheapest cost of capital available(due to the tax writeoff).

Damn!  You are an accountant!

But as for the government, it is a strange beast.  While it does depreciate assets. there is no reason to (no tax advantage).  And debt?  At least here in the Old Dominion, there are no deficits.  They are illegal.  And the feds?  You are right, but they have 2 ways to correct it.  Cut spending or raise taxes.  They are good at the latter and nowhere on the former.  Perhaps every politician should have their salary cut 50% and then figure out how to live on it, until they cut spending.  Not likely, but that is what should be done.

on Feb 17, 2006
" Which got me thinking, we've got some people that have held the same office longer then I've been alive. Maybe an exaggeration, since I can't find any numbers to support this. Instead of going after their pay, go after their job. Any year where their is both a budget deficit and a debt, all elected officials become inelegible for reelection. They would sill finish out their term as usual, but then they can't run at the next one. "


Great idea Danny! Although there is a law now about this, "Term Limits"? Or was that only for Mayors and Presidents? I can't remember, but I'm sure someone will correct me if I'm wrong. But politicians can only serve two terms now and that's a good thing.

on Feb 17, 2006
Jythier: Ok, I'll buy small debt being good/helpful, but the national debt seems far from small.
Dr. Guy: Deficit is illegal? That's one way to solve this problem.
foreverserenity: I think term limits only apply to presidents (ten years which usually means two terms). I think term limits are generally a bad idea, so long as your doing the job well and the voters think your the best person for it, you should be able to stay in office as long as you want. But running up a huge debt would seem to fail the 'doing job well' part of things.