Public Finance

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"The government has no source of revenue, except the taxes paid by the producers. To free itself - for a while - from the limits set by reality, the government initiates a credit con game on a scale which the private manipulator could not dream of. It borrows money from you today, which is to be repaid with money it will borrow from you tomorrow, which is to be repaid with money it will borrow from you day after tomorrow, and so on. This is known as 'deficit financing.'" -Ayn Rand PART ONE

In 1936, Republican Representative Harold Knuston of Minnesota proposed what would be the first constitutional amendment to balance the federal budget. The Knutson resolution would have established a per capita limit on all
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Schultze further effectively portrays a general public that would struggle to understand the impact of the amendment until it reached Main Street, taking the form of a decline in the quality and performance of government (at all levels), higher taxes, and expenditure cuts…or the cumulative effect of all three in one swoop!

An examination of other germane issues is necessary. One perplexing issue is that federal financial statements neither account for the value of capital assets nor develop a separate capital budget. “Unlike the states and many local governments, the federal government does not have a separate capital budget.” No large corporation or business could or would be allowed to operate in this manner. An accounting statement devoid of accurate accountability for capital assets are fatally flawed for use as a budgetary document. “The second major distinction between normal business accounting and the practices used by the government is that the federal government does not use accrual accounting or GAAP (Generally accepted accounting procedures) Until the federal government can account for assets in calculations, utilize accepted accounting practices, and provide more concrete facts concerning debt and deficit it would seem unwise to alter the Constitution, to the point that we cannot count the costs for an informed decision because we do not know the cost!

In comparing the two articles, Buchanan refers to budget
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