A constitutional amendment has been proposed that would force the federal and provincial governments to balance their budgets each year so that current expenditure would be no greater than revenue. (Several provinces already have laws something like this.) Discuss some advantages and disadvantages of such an amendment. How would a balanced-budget amendment affect the following, if in the absence of such an amendment the government would run a large deficit?
a. The use of automatic stabilizers.
b. The government's ability to "smooth" taxes over time.
c. The government's ability to make capital investments.