Arguments For
Many state governments require their legislatures to offer balanced budgets each fiscal year. One common argument for a balanced budget amendment is based on the observation that Congress cannot be trusted to discipline itself.Other proponents of amending the Constitution to require Congress to balance the budget are explicitly concerned about the mounting US debt. Federal budget deficits under President Bush are the largest in history in nominal dollars (but in constant dollars Reagan budgets remain the leader). Year-to-year deficits contribute to rising US debt.
Arguments Against
The Federal government massages the money supply. Keynsian economics calls for deficit government spending during a recession, to minimize the valley; it also calls for paying back the borrowed funds during a boom, which the US Congress has not done.In addition, the Federal government has the power (and responsiblity) to engage in war. War efforts invariably lead to deficit spending (borrowing money). Along this line of thinking, some argue that an amendment increase the risk having our government go into default.
The Ludwig von Mises Institute criticizes the emphasis on balancing a "future estimated budget" rather than "the actual budget at the end of a given fiscal year." The Institute also believes that "balancing the budget by increasing taxes is like curing influenza by shooting the patient; the cure is worse than the disease."
Others note that as a percentage of gross national product, the current deficits and debt are within historic norms.
Finally, strict Constitutionalists argue against a balanced budget amendment because it would "alter the balance of powers that that has served our nation for more than 200 years."