The Economic Impact of a Balanced National Budget

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I am against a balanced national budget because it is not the best solution to the long-term fiscal problems facing the nation, and it has also been associated with several negative impacts to the nation. A balanced national budget is likely to significantly threaten the economic harm while at the same time increase problems for Social Security operation and other important federal functions (Mucha, 2012).

The economic problems associated with a balanced national budget are the greatest concern, and they pertain any constitutionally balanced budget amendment version. By having a budget every fiscal year, regardless of the economy situation, there will be serious tipping weak economies risks and possible recession. The result will be longer and deeper recessions, resulting in very large job losses across the nation. A balanced national budget will force policymakers to raise taxes, or cut spending or both, in situations where the economy is already in recession or weak (Mucha, 2012).

A balanced budget will also mean that the federal spending in each financial year, has to be offset by the revenues that have been collected. Social Security will not go back to its reserves to pay benefits from the previous year in future but be forced to use its benefits even in financial years when it has ample balances.  The same will apply to civil service retirement, and military retirement programs (Mikesell, 2018). Despite the increasing need in the recent past to change the fiscal trajectory of the nation, a balanced financial budget is not the best way. It is likely to put a heavy toll on the economy and on workers and businesses in years to come.


Mikesell, J. L. (2018). Fiscal administration: Analysis and applications for the public sector (10th ed.). Boston, MA: Wadsworth.

Mucha, M.J. (2012). Budgeting for Outcomes: Key Findings from GFOA Research. Government Finance Review 1: 47:49

August 01, 2023


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