Balanced U.S. Budget Should Be the Law

In reading Robert Eisner’s “Balanced-Budget Amendment Would Spell Disaster for Economy” (Dec. 11) I found myself quickly in a skeptical position. He says there is $3.5 trillion of outstanding federal debt. But on D12 of the same issue of The Times, under “U.S. Finances,” the public debt is shown as $4.7 trillion.

He makes an analogy between borrowing by individuals and companies and borrowing by the federal government. This comparison is flawed because the private sector must pay off its debts with money it earns, whereas the government can just go on borrowing more and more indefinitely.

The fact that the government spends more than it takes in is the reason the dollar continues to buy less and less goods, services and many foreign currencies. But Prof. Eisner doesn’t mention this problem (inflation).

We need the amendment, and if passed, let’s hope it is obeyed. The original effort to do something on excess spending--the debt ceiling--is a joke. There used to be some concern when the debt bumped the ceiling. Now raising it is a routine action by Congress. The current ceiling is $4.9 trillion, versus the debt of $4.7 trillion.

JOHN R. STERLING

Manhattan Beach

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Eisner likens the federal deficit to investment of capital by a family or business. This is misleading. A wisely run firm will not borrow at 5% and invest the money at 3%. Does the increased tax revenue form deficit spending outweigh the interest paid on the additional debt?

If it did, we wouldn’t have a persistent deficit. The returns on the “investment” would show up as an eventual surplus in the federal budget. Would you put money into a company that always ran at a loss, claiming that their outlays for more capital equipment kept dipping them into the red?

DERON A. WALTERS

Goleta, Calif.

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Eisner sets forth a compelling argument that a balanced budget amendment makes little economic sense. But it is this same argument that we have heard from economists since the end of World War II when Congress realized the economy would likely outgrow any deficit they could squander on their pet projects.

The result of all of this pork-barreling is the current $3.5-trillion national debt. The legacy of the debt is a relatively low standard of living in the United States when compared to other countries long considered our poor stepchildren.

So while the balanced budget amendment may not make perfect economic sense, its backers know that it will force our lawmakers to place their well-fed snouts into an empty trough.

KEVIN H. PARK

North Hollywood