Leading Economists Oppose Balanced Budget Amendment
A group of leading economists, including five Nobel Laureates, today publicly released a letter to President Obama and Congress opposing a constitutional balanced budget amendment. The letter, which the Economic Policy Institute and the Center on Budget and Policy Priorities organized, reads in part:
While the nation faces significant fiscal problems that need to be addressed through measures that start to take effect after the economy is strong enough to absorb them, writing a requirement into the Constitution that the budget be balanced each year would represent very unsound policy. Adding additional restrictions, as some balanced budget amendment proposals would do, such as an arbitrary cap on total federal expenditures, would make the balanced budget amendment even worse.
The signatories are Nobel Laureates Kenneth Arrow, Peter Diamond, Eric Maskin, William Sharpe, and Robert Solow; Alan Blinder, former Vice Chair of the Federal Reserve; and Laura Tyson, former Director of the National Economic Council.