So given our current institutional structure, the answer is yes, if we balance the budget and leave it that way, the world as we know it is definitely going to end. (And with a bang, not a whimper.)
And given the policy of going cold turkey to balance probably does ‘sound like a pretty reasonable idea to the American public,’ it’s looking more and more like both sides are setting up to let it happen.The Center of the Universe
Rand Paul – “Cold Turkey Balanced Budget is a Good Thing”
Worried about the debt ceiling? Republicans aren’t
Warren Mosler
Ii would also say that if this scenario comes to pass it is likely the end of capitalism as we know it, Then it will be obvious that without government kicking in for accumulated saving of net financial assets, capitalism breaks down. Endogenous credit is not sustainable given profit share relative to labor share typical of managerial capitalism. The alternative is to ban accumulated saving and rentierism and force productive investment, as Keynes realized in calling for the euthanasia of rentierism.
There is a catch to the proposed balance budge proposal, however. Military spending doesn't count. The agenda is to eliminate social spending and government administration, while expanding the military contribution to G. This can always be expanded as needed by fomenting fear and starting wars if necessary. This is the terminal stage of empire historically.
