Flaws in Balanced Budget Amendment

Sen. Jim Demint and others have introduced S. Joint Res. 38,  The Balanced Budget Amendment. Although this would seem to be a good idea on its face, it has several flaws:

1. There is no effective enforcement mechanism. Congress could, and likely would, simply ignore it, and the courts would have neither the will nor a mechanism to enforce it. If someone sued to halt some expenditure, the courts could not decide that expenditure was in violation, and no one would have standing to sue over an entire budget.

2. There is nothing to prevent the government from simply creating more fiat currency out of thin air and calling it "receipts". Nothing is accomplished without eliminating fiat currency. If that is done, the rest takes care of itself. If it is not, then "balancing the budget" is a delusion.

3. It should be a concurrent resolution, not a joint resolution. Constitutional amendments need only be proposed by a 2/3 vote of both houses of Congress. They do not need the signature of the president, as a joint resolution does. A measure adopted by both houses that does not need the signature of the president is a concurrent resolution. This may seem to be a quibble, but members of Congress should know better.

The proper solution is an amendment to do away with fiat currency, such as this one:

Legal tender

Congress shall have the power to define legal tender only on territory for which it has exclusive jurisdiction, and state legislatures only on exclusively state territory. Neither Congress nor the states may make anything legal tender that does not consist of, or is backed by, gold, silver, or energy, nor use anything but legal tender to pay its debts, or accept anything but legal tender for the payment of taxes.

Sen. Demint and others are approaching the subject from the wrong direction.

Note the addition of energy to the list of backings for currency. See this for more on that.

Some alternative proposed "balanced budget amendments" introduce other flaws. For example, S.J. 35 has a provision that uses the term "gross domestic product" (GDP), a poorly defined number that has no place in the Constitution.

Report of partial audit of the Fed showing $14 trillion issued to banks.

Budget debt

The main problem with debt is that any agency can add to the national debt, unconstrained by any spending budget. Don't have the money appropriated, just create an account payable with someone. No limit on that. We need to budget the creation of obligations as well as of spending. If it's not in the debt budget, an agency can't create it