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Jared Bernstein and James Horney Discuss the Perils of a Constitutional Balanced Budget Amendment


A constitutional balanced budget amendment “is a really bad idea,” Jim Horney says in this video.  “[I]n the long run, under current policies, we’re facing deficits that are way too large.  We should get them down. . . .  But we don’t have to balance [the budget].  What we have to do is bring deficits down to a level, somewhere below 3 percent of GDP, that would keep our debt from rising constantly as a share of the economy.  That’s the danger.”

He and Jared Bernstein explain that policymakers can reduce deficits without enacting a balanced budget amendment, which could seriously harm the economy — by, for instance, making recessions longer and deeper.

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