Apple Trees for Firewood: James Buchanan’s Case for a Balanced Budget Amendment in the Context of U.S. Fiscal Policy

Abstract

Throughout his academic career James Buchanan was deeply concerned about the proclivity of constitutional democracies to go into debt. He feared that the process of accumulating public debt would increase the tax burden on individuals to an extent that would eventually be fiscally unsustainable and subversive for liberty. This paper uses the example of the U.S. to illustrate, in concrete terms rather than abstract modeling, that Buchanan seems vindicated by the facts. To sideline him as a doomsayer and dismiss his balanced budget policy proposal out of hand would be inappropriate.