Abolish the income tax completely and implement the Fair Tax.
They didn’t. Current retirees get FAR more back from Social Security than they put in. The prescription drug entitlement is new, so they didn’t pay a penny for that. Do workers in the U.S. pay into a medicare fund? Because seniors get free health care, too.
Conservatives and Liberals alike should be against taxing some young middle class family so that their rich old aunt can get free prescription drugs.
The majority of seniors are not rich, SS makes up about 40% of the average retirees income. I can see your point, but those rich aunts & uncles are a tiny minority. Besides those rich old aunts pay property taxes and state taxes so their rich nieces and nephews can get state and local funding for college. If your parents make 20k or 200k a year 2/3 of your college tuition is still subsidized. My roommate goes to college in state. His biological father, biological mother and stepfather are all physicians. He still pays the same 6-7k a year for tuition as the kid whose father and mother work at walmart. I don’t mind it.
Social security is still solvent until 2040 or so, and even with minor changes it will be solvent until the 22nd century.
Agnostic Pagan already brought forth my main answer. Also, when the government stops borrowing, that also means that they will curtail their spending. A good example is Post WWI Germany (though, admittedly, it is a bit of an extreme example because society was leaning very heavily on the government (something that I don’t encourage)). In this state, a good portion of the economy depends on government spending and contracts. In my industry, there are many corporations that all they do is sell to the government. If that segment of the market is made smaller by less spending, then overall aggregate demand decreases (taxes decrease, government income decreases, budgets are then forecasted downward even more because less revenue, etc). This in of itself is great reason to worry, but when something happens, like a recession, or something that requires more government, balance budget amendments ties the hands of the budget planners. Deflationary indicators start increasing as the government is then forced to either raise taxes or lower spending (or both). That is a main ingredient for a recipe of deflation.
Whatever the percentage is, I’m still saying that we should means-test these programs. Paul Newman does not need subsidized health care or free prescription drugs. Even if the number of seniors cut off is 10%, that’s a 10% savings to these programs right off the top, which is a HUGE amount of money. Probably four or five times NASA’s budget, for example.
Keynes was naive in that regard. When it’s politically acceptable to run a deficit, politicians will run a deficit. Look at what happened in Canada in the 70s and 80s, under both the Liberals and the Conservatives. We ran up gigantic debts that will take decades to pay off, and the deficit strangled our economy.
Besides, the debt needs to be down to a more managable level before allowing a cyclical deficit. Keynes believed that government should use surpluses in booms to pay off debts incurred during recessions. It will take a lot of consecutive surpluses to pay down the current debt.
No more than a company’s income statement will show its assets. The two can’t really be compared(although many will try).
To answer the OP, I think the American public believes a balanced budget is a good thing and that a large budget deficit is a bad thing in principal. However, as mentioned earlier, the threat posed by running huge deficits seems too abstract a problem to many Americans for its resolution to take priority over other matters. Generally, the public won’t demand immediate action until some kind of crisis related to the debt manifests itself in tangible form. Thus, there’s no real incentive for politicians to either push for budget cuts or tax increases–especially the latter. The track record for politicians who advocate tax increases is not encouraging to anyone considering doing the same. The tax increases by Bush I and Clinton were effective in reducing the deficit during the 90’s and did nothing to hinder the economic boom during the decade. Yet, despite this, both Bush I and Clinton suffered dire political consequences as a result. Bush I was challenged by a schism of anti-tax Republicans led by Pat Buchanan in '92 and was never able to completely get their support by the time of the general election. Clinton, while not suffering electorally, saw his party lose control of Congress in '94 due, in part, to apparent lingering anger over its support of the 1993 tax increase. As a result, tax increases and–to a lesser extent–severe budget cuts have become political third rails. Until somebody comes along who’s brave enough (or foolhardy enough depending upon your point of view) to push for such measures without being irreparably damaged politically, no one’s ever going to seriously address balancing the budget unless there’s some type of severe economic calamity at hand.