The Balanced Budget Amendment is a bad policy response to the 2011 debt issue.

Pro 1: No way to stop near-term downgrading.I have been trying to figure out what Pro's point is in this argument, so far it seems unsuccessfully. Why would a BBA stop prevention of downgrading? It cannot be that a BBA would prevent raising the debt ceiling, because the BBA would not take effect for about seven years. So what is Pro trying to argue? My current guess is that he is claiming that because passing the BBA was a condition in the House-proposed legislation that raised the debt ceiling, that because the BBA would take so long to enact, the raising of the debt ceiling would be too late to avoid the August 2nd deadline. If that is what Pro meant, it is a misunderstanding of the House legislation. The House legislation only required that Congress pass a BBA, not that it be ratified by the states. Congress could pass the amendment in as little as a day if it wanted to, as it just requires a two-thirds vote. There was no requirement that the states ever ratify it.Pro 2: BBA UnenforceablePro argues, "What this system of enforcement says is that unelected judges will be the ones combing through our budgets finding what spending to nix." That isn't quite it. I quoted the National Journal article which correctly states, "If the constitutional amendment had been violated, a federal court would issue an injunction ordering Congress and the president to stop breaching it. The legislative and executive branches would then have to decide what to do about that." The Courts throw the problem back to the legislature and executive with an order to cut a certain amount, and they, not the courts, get to decide exactly what to cut.Theoretically, the legislature and executive might refuse to make the cuts ordered. In that case, the problem would revert back to the Courts who would decide what to cut. The most likely result would be for the Court to order a straight across-the-board percentage cut. The potential problem is no worse than that with any other Constitutional requirement. The Courts order general remedies and if those fail, they order specific actions. For example, the Courts ultimately ordered busing as the specific remedy to racial discrimination in education.Pro says that state BBAs are not precedents because states can run deficits in capital budgets. It could be reasonable for a state to borrow to build an expensive bridge or rail line, then repay the debt with bridge tolls or train fares. The Federal government has no need for such a provision because Federal capital expenditures are a negligible part of the budget. The Federal budget comprises Medicare, Social Security, other entitlements, interest on the national debt, regulatory agencies, and Defense. The Defense Department acquires some capital goods, but the dollar value is small compared to the budget, and there is no associated revenue from use. The operating budget of states is fully comparable to the Federal budget.States use some accounting tricks to try to convert expenses to the category of "capital." They issue "revenue bonds" against future fees. That evasion is not a benefit, and should not be in a Federal BBA.If some extraordinary high-capital project appeared, it would only take a 60% vote to finance it with bonds.Pro 3: Unrealistic near term cutsPro concedes that unrealistic near term cuts are not required by the BBA, because no near-term cuts are required. Pro says that if an economic disaster occurred, "The BBA doesn't allow for any sort of protracted response ..." That's not true, It only takes a 60% vote to incur new debt. Under the present system, legislation that is opposed requires 60% to get through the Senate. The change is to increase the requirement from 50% to 60% in the House. The legislation passed in response to the 2008 financial crisis, both TARP and the Stimulus Plan, http://www.google.com... met the 60% requirement in both houses. The option is entirely up to Congress.Pro 4: Vulnerability to recessionPro asks, "Which is it? Are you going to argue that recessions are caused by overspending, or are they a consequence of government spending?" I said that government overspending is a cause of recessions. That's because government overspending creates an artificial bubble that eventually bursts. Leading up to the 2008 crisis, the Fed had kept interest rates too low, encouraging unsound speculation. Government spending by Freddie and Fannie buying up unsound loans caused unsustainable speculation in housing. Had the government maintained normal interest rates and insisted on 20% down payments for housing loans, the recession would not have been nearly as severe. There might have been some recession but not the disaster that occurred. I said that after a recession occurs, revenues into the government drop. There is nothing contradictory about that. Overspending is the cause, and revenue drop to government is the result. I said that there are no automatic stabilizers, which Pro claimed would be destroyed by a BBA. Pro had not named any, so his obligation was to name them. I argued that monetary policy was a significant stabilizer, and that a BBA enhanced the effectiveness of monetary policy controlled by the Federal Reserve. So what did Pro cite as an automatic stabilizer? The only one he could name was unemployment insurance. However, unemployment insurance is provided through states with funding from employers. It operates without regard to a Federal Balanced Budget Amendment. In the current recession, Congress voted to extend unemployment benefits beyond the states "automatic stabilizer" limits.Paying long term unemployment hurts recovery because people tend to stay unemployed for as long as benefits are paid. This was demonstrated by policy in Denmark. When they paid benefits for five years, people stayed on unemployment for five years. They reduced it to four years and people remained unemployed for four years. Now they are reducing it to two years, http://economix.blogs.nytimes.com... Nothing in the BBA inhibits the stabilizer function, but it beneficially discourages paying long term benefits financed with Federal deficits.My claim is that if fiscal policy is sound, monetary policy is more effective, because it doesn't have to do the work of both monetary and fiscal policy.Automatic stabilizers like unemployment insurance can be provided through rainy day funds, previously argued. It's Pro's obligation to cite any that cannot. He has not done so.Pro 5: Alternative mechanismsPro says he never advocated a line-item veto authority, but that's what the Cato Institute study he referenced proposes. Impoundment means the President refuses to spend money appropriated by Congress That's functional equivalent to line-item veto, because the President makes an item-by-item choice of what to fund. I argued that it doesn't work because it requires a President that is opposed to deficits. Obama wants massive deficits, which has engendered our current predicament. Overspending is now a characteristic of presidents. A BBA solves the problem.Con 1: Fixes a flaw in democracyPro's example is that politicians, like Hamilton, can act with fiscal responsibility even when not required by the Constitution. We are 200 years past that solution. The fix should be made permanent with a BBA that provides a limit.Pro says that Jefferson preferred impoundment. That requires a President that believes in fiscal responsibility. We don't have that either. If we did have a responsible president, that would provide no guarantee of future presidents.Con 2: The BBA discussion is appropriate because it addresses chronic deficitsThe August 2nd deadline was met wihout a BBA. The US credit rating was downgraded anyway, http://www.npr.org... because the long term was not well addressed. A BBA ould have avoided the downgrade.