ABSTRACT
This chapter presents a set of norms and rules of procedures that would facilitate economic convergence within an expanded European Community over a considerable period of time. If one places the control over budget balance rather than either revenue or expenditure, the difficulties multiply. What the PAYASUGO rule does, when taken together with subceilings, is alter the fundamental rules of rationality in budgeting. PAYASUGO also reverses completely the old idea of budgeting as budgeting by addition. The interest groups and politicians who support these programs, see themselves as supporting good things. It may well be that instead of relying on five-year expenditure estimates we could have a simpler rule: Out-lays for the next fiscal year will be exactly what they were the year before. This would result in less fooling around, less time wasted and more accuracy.
