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A view from Lick Skillet by Gerald Largen: Please define ‘Gross Domestic Product’ of U.S.

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As the regular reader of this column knows, we try to keep such readers abreast of important issues and developments in our government.
One such development about which much has been said and written is the proposed “Balanced Budget Amendment;” but despite all the talk and writing, little specific has been told or written about just exactly what this Amendment would entail, if adopted.

So that you, gentle reader, would know this, we print herewith the exact language of the Amendment, as proposed:
“Section 1. Total outlays for any fiscal year shall not exceed total receipts for that fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific excess of outlays over receipts by a rollcall (sic.) vote.

“Section 2. Total outlays for any fiscal year may not exceed 20 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific amount in excess of such 20 percent by a rollcall (sic.) vote.

“Section 3. Prior to each fiscal year, the President shall transmit to the Congress a proposed budget for the United States Government for that fiscal year in which total outlays do not exceed total receipts.

“Section 4. No bill to increase Federal taxes shall become law unless approved by two-thirds of the duly chosen and sworn Members of each House of Congress by a rollcall (sic.) vote.

“Section 5. The Congress may waive the provisions of this article for any fiscal year in which a declaration of war is in effect.
The provisions of this article may be waived for any fiscal year in which the United States is engaged in military conflict which causes an imminent and serious military threat to national security and is so declared by a joint resolution, adopted by a majority of the duly chosen and sworn Members of each House of Congress, which becomes law.

“Section 6. The Congress shall enforce and implement this article by appropriate legislation, which may rely on estimates of outlay, receipts, and gross domestic product.

“Section 7. Total receipts shall include all receipts of the United States Government except those derived from borrowing.
Total outlays shall include all outlays of the United States Government expect for those for repayment of debt principal.

“Section 8. This article shall take effect beginning with the fourth fiscal year beginning after its ratification,”

After having read and thought about this proposal to change our Constitution, no doubt several questions or comments have come to your mind as they have to ours. Here are a few:
First of all, what makes this group (the 19 sponsors, all Republicans, including Sens. Cornyn, and Crapo, as well as Georgia’s own dynamic duo of Isakson and Chambliss) think that they are so much smarter than the original Framers of the Constitution, such as Washington, Madison, Franklin, and Hamilton? The Framers did not see fit to subject the government to such restrictions, why should these come-lately johnnies?
No doubt all 19 of these folks would loudly proclaim that they are Conservatives.
But aren’t true conservatives people who want to preserve or conserve things? Yet they would radically alter our beloved Constitution which has successfully served us so well for almost two and a quarter centuries.

One of those popular slogans that most real conservatives observe says, “If it ain’t broke, don’t fix it!” If that slogan ever had application, it applies four-square to changing the Constitution.
The experience of the citizens of California has amply demonstrated that such draconian restrictions on the taxing and spending power of government does not and cannot work.

Ever since California adopted Proposition 13 several years ago, the state has been in almost perpetual crisis because they cannot meet their obligations, either to spend, or to tax. Only a fool would want to subject our country as a whole to the trials and tribulations that our fellows on the West Coast have endured for so many years. The latest episode centers around the fact that they may have to release a large part of their prison population because they cannot spend the money to make the prisons conform to constitutional requirements. Do we want that for the nation at large?
But, even more fundamental to serious doubt about the wisdom of this particular Amendment are some of its specific provisions.

Certainly the concept of a balanced budget, of not spending money you don’t have, of the soundness of the old advice that “neither a borrower nor a lender be,” should appeal to all thoughtful citizens, but it is highly doubtful that any of these concepts should be a law, much less a part of the Constitution.
If these principles were in fact general law there are few American families that would own a home, since most are bought with borrowed money — money you don’t have, but hope to acquire.

Nor would we have a widespread automotive industry, inasmuch as most are bought on credit.
There would be no credit cards.Banks would be few and far between and little needed in a cash only economy. And as we pointed out a few weeks ago, only once in our nation’s history, in 1835, was the United States government not in debt.

Turning to specifics contained in the proposed Amendment, probably the most problematic provision is the one in Section 2 limiting total outlays to 20 percent of the gross domestic product.
We seriously doubt that there is a single one of the 19 sponsors who could adequately explain just what the gross domestic product is. It is defined as the monetary value of all goods and services produced in the country in a year.
But just what does that mean? What is covered by the word services?
And in this “global economy,” rife with “outsourcing”, etc., what does produced in the country mean?

If a new auto is offered for sale here, but consists of an assemblage of parts from various other countries, is the total price included in GDP, or is only the cost of work done here? Of a company’s overseas earnings, what part, if any, is included in GDP?
Are the “services” of the church, or charities included? Are a child’s baby-sitting earnings or lemonade stand sales included? You can see the problems, can’t you?
And in order to come anywhere close to an accurate figure for GDP, the government will have to make inquiries and keep records that will make the concept of personal privacy a thing of the past.
There are other problems with this proposal, but we think we have pointed out enough so that the reader can see why reasonable minds cannot support this amendment as proposed.