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John Tamny of RealClearMarkets
Perhaps in an effort to shore up his budgetary bona fides during a period of reckless spending, President Obama recently announced his goal to put the federal government on a budgetary diet. As Obama put it, under his plan “Congress can only spend a dollar if it saves a dollar elsewhere.”
At first blush, all of this seems reasonable. Irrespective of party affiliation, Americans are upset with Washington’s utter lack of budget discipline, and any rule meant to rein in spending is something we should all endorse.
But the problems with this pay-as-you-go budgeting, also known as “paygo,” are many. Indeed, it’s only after addressing the broad implications of paygo that we see it has very little to do with growth, not to mention spending discipline.
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