What is a balanced budget, and why is it so much easier to balance state budgets than the federal budget?

Answer 1

A balanced budget simply means that the government spends no more than it takes in. Pure and simple! Some states have mandatory balanced budget laws. This forces the state legislature to balance the budget. There is no such requirement in the Federal budget.

The last time we had a balanced budget was during the Clinton administration. He actually left office with a SURPLUS, meaning that the govermnent spent LESS than it took in. The last time prior to Clinton was during the Johnson administration -- 1964 or 1965 if memory serves properly.

The current administration has run the budget squarely into the toilet. In a little over 5 years, they squandered the surplus left to them and ran the deficit to a level higher than the combined deficits of EVERY prior administration in the history of the nation COMBINED. Even if 9/11, Iraq and Katrina are factored out, it would STILL be the largest deficit in history. Kinda makes you wonder, doesn't it?? $7 TRILLION down the drain and still flushing!

Answer 2

A balanced budget is where expected cash receipts are equal to expected cash outflows, or more succintly, revenues equal expenses. For governmental entities, this generally means that tax revenues are equal to (or exceed) the expected payments made by the entity.

Three reasons why the Federal Government can't balance its budget:


1. It's generally easier to balance a State budget due to the fact that most States have a constitutional amendment that requires a balanced budget. The Federal government does not have this requirement, and while Congress and the White house will say that a budget is balanced, they generally use accounting tricks or other "slight of hand" to reconcile revenues and expenditures.

2. Another issue is the pure size of the Federal government in terms of revenues, expenditures and constituency, in comparison with even the largest state. To give an example, California is the largest state in the union, in terms of Gross Domestic Product (GDP), (if California were a separate country, it would be the eighth largest economy in the world), however, the GDP of California is still less than 12% of the United States GDP. Layer that on top of the extremely diverse constituency of the US, where outlays are made to Corn farmers in Iowa to make biofuels, Car manufacturers in Detroit to make cars, Nuclear laboratories in the Midwest, and Nuclear Waste storage facilities in the Southwestern desert.

3. Lack of political will. Balancing the budget is a very difficult thing, and hard choices have to be made. With the representative democracy that we have, the Senator and Congressman from your state go to Washington to be sure that you and your community get what they need from the Federal Government, and this generally translates to votes (either for or against) the current politician, based on how well he/she gets that particular job done. In other words, the politician that doesn't get as much for his constituents as he/she possibly can, is a politician without a future. Now multiply that times 535 (the number of combined Congressmen and Senators), and you can see that a balanced budget is not an easy thing to accomplish.

Answer 3

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