Steve Chiotakis: All but four countries in the European Union have agreed to a new treaty that would enforce strict budget rules among those countries. The U.K. was a stumbling block, looking for a more felxible way of joining in the treaty, or not joining. Economists say the deal is more about preventing a future crisis, but does include a balanced budget rule that would trigger sanctions if a country violates it.
So, what does that mean for the push here in the U.S. for a balanced budget amendment? Marketplace's Gregory Warner reports.
Gregory Warner: For the 75 years, a proposal to balance the federal budget by rewriting the constitution has floundered in the halls of congress. This year, the proposal came 23 votes shy of clearing the House. Compare that with Europe. The debt crisis might seem like its been going on forever, but they got a balanced budget requirement passed in just a couple months.
Len Burman: If a balanced budget passes in Europe it could be seen as an indication that we should follow suit.
Len Burman is a professor of economics and public affairs at Syracuse University. He there are more parallels here than you would think: just as European states now must balance their budgets, 48 of our states already have to balance theirs. Except, in our case, we have a federal government.
Burman: And the federal government has actually been able to act as a safety valve, by helping states when they have tough times and running deficits at national level. We wouldn't be able to do that anymore.
But one economist's safety valve, might be another politician's escape hatch. The leading Republican candidates for president all say they'd support a balanced budget amendment. But it's hard to imagine them on the campaign trail, saying, "Let's learn a fiscal lesson from Europe."
In Philadelphia, I'm Gregory Warner for Marketplace.