Public consultation process
Please scrutinise all the proposed amendments and replies before commenting or voting. Short comments are most often read and must not exceed 100 words.You can propose an Amendment at the bottom of this page - please read the guidelines .
Note that the original wording appears again first below and sustains the same comment & voting regime as all other amendment proposals.
Section 8.9. Section 8.9. The Government will adopt a budget, limited to a maximum deficit of three per cent of the gross domestic product, for the full term of its administration.
Section 8.9. With this clause in place, I would have specific concerns about response to a National/Global crisis such as Covid-19.
Section 8.9. Again it is not appropriate to prescribe in a Constitution what level of budget deficit must be adopted by an elected government. It is a recipe for permanent austerity.
You have to understand "sectoral balances" in the context of macro-economics. If the government can only run a 3% deficit and there is an overseas sector surplus of 5% (i.e. a 5% trade deficit) there must be a 2% private sector deficit as the three sector deficits/surpluses always add to zero. To get the private sector out of debt the government must run a deficit in excess of 5%. You just can't tie the hands of an elected government like this.
Section 8.9. This comment is irrelevant and misleading. Sectoral balances relate to the netting of the amount lent and the amount borrowed within the same regime. Governments with their own currency are not required to borrow – they do so because they choose to subscribe to fractional reserve banking. It is clearly proposed in Section 8.5 that new money is issued debt-free to finance fixed capital formation in the public sector. That is surely more rational than issuing unrepayable public debt as QE and feeding it to the banks… but back to the point - a balanced budget is simply a discipline which obliges an administration to act responsibly and has nothing to do with austerity. And speaking for myself, I believe strongly that any proposal that our children should not be born into debt is a legitimate matter for a Constitution.
Section 8.9. Section 8.9. The Government will adopt a budget, limited to a maximum deficit of three per cent of the gross domestic product, for the full term of its administration.If Parliament, by a two-thirds majority vote of its members, passes a resolution, this deficit threshold can be exceeded for a single year in response to immediate needs of the people of Scotland.
Section 8.9. The “Budget” is the forecast estimate of tax revenues against day to day running costs of the country – the ‘overheads’. Exceptional demands like wars, Quantitative Easing, Pandemic subsidies and the like come from the Central Banks i.e. the Bank of England, Federal Reserve etc. The Budget makes politicians accountable to the taxpayers. That said a 2/3 majority would be tough and do no harm
Section 8.9. Still too prescriptive. This should be a recommendation rather than a constitutional obligation. Countries which issue their currency need not fear slightly higher deficits.
Section 8.9. Why run up a deficit which accumulates to National Debt which no government ever repays? The only beneficiaries are the banks who indirectly collect interest on it. and it does nothing to keep government accountable to the people.
Section 8.9. The National Debt is on the other side of the accounting ledger simply the National Savings, and the beneficiaries are mostly pension funds, private investors, trusts, etc. Some is held by banks as part of their capital reserves. This clause should be removed entirely as it is not appropriate to have in a constitution. The EU 3% rule was literally a back of the fag packet agreement between Helmut Kohl and Francois Mitterrand in the negotiations about establishing the Euro. It was chosen because at the time it would have no effect on France but sounded 'tough' to the Germans. It has no basis in economics and neither do any other fiscal rules.