Saturday, February 9, 2008
Gordon on The Outlines of a Postwar American Fiscal Constitution
Cameron Gordon, University of Canberra, has posted a paper, Balanced Budgets and the Withering of U.S. Fiscal Policy: The Outlines of a Postwar American Fiscal Constitution. Here's the abstract: In their famous book, Democracy in Deficit, James Buchanan and Richard Wagner define the notion of fiscal constitution: Whether they are incorporated formally in some legally binding and explicitly constitutional document or merely in a set of customary, traditional, and widely accepted precepts, wecan describe the prevailing rules guiding fiscal choice as a `fiscal constitution.'(Buchanan and Wagner 1977, 21) This paper analyzes the history of American fiscal policy from post-World War II to the Gramm-Rudman Act of 1985, using the fiscal constitution concept as a framework. The paper generally finds that the fiscal constitution loosened considerably during that period, but did appear to have some real tightening as a result of Gramm-Rudman.