Pawlenty calls for Republicans to push an amendment mandating a balanced federal budget – a recipe for disaster, especially in today’s financial climate.
When the economy hits the doldrums, tax revenues will fall. Under Pawlenty’s proposal, the federal government would not be able to offer aid to local or state governments, forcing them to raise taxes and slash services, exacerbating the slowdown. The next batch of tax revenues would clock in even lower, and we’d need another round of cuts, which would plunge the economy into depression. (Note that a mandated balanced budget also pushes a growing economy to higher and higher inflation levels.)
Fiscal responsibility, yes, but in dire economic times, there’s no sense in constraining spending.