Date: Tue, 4 Feb 1997 11:10:45 -0500 (EST)
From: Gerald Levy <glevy-AT-pratt.edu>
Subject: M-I: balanced budget amendment


James F wrote:

I have noticed in todays N.Y. Times a full-page advertisement  by 1100
economists
opposing the Balanced Budget Amendment.  In addition to 11 Nobel
laureates and numerous other "usual suspects" I noticed some names
familiar to subscribers of this list such as Jerry and Barkley.  Now, I
take it for granted that the merits of opposing the Balanced Budget
Amendment need not be argued at great length on a Marxism list.  Rather I
think it would be of more interest here if Barkley or Jerry or others
would present to us a Marxian political economic analysis of the Balanced
Budget Amendment in terms of what forces are supporting it and what forces are
opposing it.  In other words I think we would be interested in seeing
analysis of this debate in class terms with emphasis on the impact that
passage of the Amendment might have on the role of the state and of the
state's relations to the different classes and class fractions in the
United States.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Actually, I haven't seen the _NYT_ advertisement yet. But, let me respond
(briefly) to your questions:

Firstly, I think that the proposal for a balanced budget amendment can't
be seen entirely in terms of the US. That is, I see it as part of the
Neoliberalist austerity strategies being pushed internationally by the
World Bank.

Secondly, the forces behind the balanced budget amendment in the US  are
primarily the conservative forces within the Republican and Democratic
parties. Most -- but not all -- of the economists who signed the _NYT_
advertisement are old-school liberals -- Keynesians. It should be noted,
though, that support for the bba comes not only from the ruling class and
reactionary apologists for capital -- rather there is significant support
for the bba (influenced by the mass media and the "Christian
[white] Right", especially some deplorable reactionary talk shows on
radio and cable) but also from significant segments of the working-class
and the poor.

Thirdly, regarding the effect of the bba if passed: unless taxes are
increased significantly (unlikely because of the political consequences),
it will mean that the non-military part of the budget will be radically
reduced. This not only means that social services provided by the federal
government will be cut to the bone, but "aid" going to the states and then
urban areas will be sharply cut as well. This would then mean that states
and urban areas would have to increase taxes (also an unlikely eventuality
politically) or services provided by the states and cities for
transportation, housing, education, social services, etc. will all be
largely amputated. This means not only increasing poverty in urban areas
(especially) but also crumbling "infrastructure" -- and perhaps some more
L.A.-style-riots. One might also anticipate that the more affluent will
continue to leave urban areas, thereby, further decreasing the tax base of
these cities.

Forthly, the appeal of the bba rests, in part, on the fact that the Left
(what Left?) hasn't put forward any viable alternatives.

Jerry



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