Warren Buffett’s Deficit Reduction Plan

Warren Buffet says, “I could end the deficit in five minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of Congress are ineligible for reelection.”

On the one hand, I’m fairly confident Buffett is correct that if such a law were passed, the deficit would shrink to below 3% of GDP. On the other hand, I’m presuming Congress would have to pass that law. How likely is that?

The Republicans are talking about a balanced budget amendment to the Constitution. They also seem to like the idea of term limits (that is, until they’ve actually been elected). Buffet’s plan combines the two ideas. I’d love to see Buffett’s idea go viral, pushing Congress to enact it... but I don’t foresee that happening.

Randall G. Holcombe is a Research Fellow at the Independent Institute, the DeVoe Moore Professor of Economics at Florida State University, and author of the Independent Institute book Liberty in Peril: Democracy and Power in American History.
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