Budget Premise Based on Flawed Comparison

I want to comment on Robert Eisner’s commentary (“Balanced-Budget Amendment Would Spell Disaster for Economy,” Dec. 11) declaring that not only is a balanced federal budget unlikely to happen, but it makes terrible economics to do so.

Eisner’s premise is based on a flawed comparison to normal household borrowing such as a home mortgage or a college education. The federal government is an ongoing concern that will operate for many generations to come. A household purchasing a house will obtain benefits during and beyond the period when the mortgage is paid off, usually 15 to 30 years. A prudent household would not, however, borrow money for consumables, such as groceries.

If one were to borrow funds for a year to cover a week’s worth of groceries, the interest payments on this debt would quickly outweigh the weekly cost of groceries. For the first few weeks, the cash flow would be advantageous; however, after a few more weeks, the cost of the interest will exceed the weekly cost of groceries, and the need for groceries will still be there. It is wiser to simply pay for them out of normal cash flow.

Eisner compares the federal government with a household, ignoring the fact that much of what the government is borrowing is not for goods that will return long-term value, but for normal recurring operating expenses, much like a household’s groceries. Federal spending on recurring expenses, such as Social Security, military operating expenses (not R&D;), entitlements, etc., must be treated as operating expenses with known revenue to support them.

Eisner further states the hopelessness of controlling federal spending by comparing it to the waves of the Pacific Ocean. Hogwash. Our system elects executives to make those crucial decisions and produce a realistic budget and operating plan.

Federal spending is the one item that most legislators do best. But they are empowered to choose how to spend, not just spend without regard to financial responsibility.

A balanced budget is a necessity for the long-term stability of our economy. Unfortunately, it is easier in our political system to put it off to the next term than to deal with this problem head-on.

Dave Dubrin

Westchester