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| WHY BALANCE THE BUDGET? August 8, 1997 |
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Questions asked
in this forum:What's the difference between the deficit and the national debt? Should domestic spending be considered as "investments?" How does the deficit relate to the $300 million interest payment? Is balancing the budget short-sighted? Will a balanced budget reduce interest rates? Does the budget deal include a plan to reduce the national debt? Viewer comments on a federal balanced budget
NewsHour Backgrounders
July 29, 1997:
A background report and debate on the budget deal struck by Congress and the White House.
June 26, 1997:
The Senate works on finishing touches for the budget reconciliation.
June 10, 1997:
Rep. Bill Archer and Treasury Secretary Robert Rubin discuss the budget negotiations.
May 22, 1997:
The Senate works through numerous amendments on its way to a balanced budget deal.
May 2, 1997:
Congress and the President make a deal to balance the budget by 2002.
February 26, 1997:
The Republican Balanced Budget bill is rejected by the Senate, overturned by one vote.
February 7, 1997:
Office of Management and Budget Director, Franklin Raines, and Sen. Pete Domenici (R-N.M.), debate President Clinton's budget proposal.
January 30, 1997:
The NewsHour historians look at the history of bipartisanship.
Browse the NewsHour's coverage of the Budget
Browse past Shields and Gigot debates.
Outside Links:
The Office of Management and Budget has placed President Clinton's FY 1998 Federal Budget request on the Internet.
Andre Dermant of Palo Alto, CA, comments:
It is impossible to have a valid discussion of the so-called "balanced budget" without keeping in mind that what is referred as budget is the Unified Budget. This means that the surplus of all the Trust Funds are included. The Social Security Trust Fund alone reduces the Federal Budget deficit by $60 billions EVERY YEAR. It is dishonest to speak of a balanced budget without being specific about what budget we are dealing with.
Only when the Federal Budget reaches a balance without the Social Security Trust Fund surplus, can we talk about a truly balanced budget. Therefore I believe the politicians are perpetrating a fraud on the American public without such clear definitions and should be required by law to state the budget deficit with and without the Trust Fund surpluses.
Thomas Zeal of Salt Lake City, UT, comments:
It seems to me that the only way to rid ourselves of the national debt, $5.4 trillion according to your article, is to balance the budget and begin paying it off.
This assumes that it would be a good idea to pay off the national debt. I happen to think that it would be a good idea. I have been in debt personally and I would much rather have zero debt. If I had zero debt; my house was paid, my student loans were paid, I could actually afford to take a vacation, buy a new car, retire early, etc.
I am sure that people could find some other instrument than government bonds to finance their retirements, etc., and that the $300 billion that we spend in interest every year could be used for more worthwhile purposes; possibly reduced taxes, help for the elderly, help for social security or we could invest the surplus to use for a "rainy day", etc.
Entitlement programs don't need to be affected in low revenue years because we would have a prudent reserve available that would help us out. Not being in debt just makes good financial sense, and I don't think that we will get out of debt until the government stops spending more than it receives, hence a balanced budget amendment. Sometimes it is necessary to be in debt but only if you don't have enough money.
The annual revenues of $1.7 trillion will divide into the national debt of 5.4 trillion approximately 3 times. That really isn't all that bad. On a personal basis that would be like someone with an annual income of 100 thousand buying a house and other things worth 300 thousand. Lots of people are in this position but wouldn't it be a lot nicer if the house were paid off and that mortgage payment was going into investments every month instead?
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