I think Mitchell has the right of it: the root of the problem is government spending growing too fast, not deficit spending or even debt, per se. Maybe the Swiss solution is something we should look at. (Yep. The original article is about two years old. I ran across while cruising the Internet and thought it worth sharing, even at its “advanced age.”)
I’ve argued, ad nauseam, that the single most important goal of fiscal policy is (or should be) to make sure the private sector grows faster than the government. This “golden rule” is the best way of enabling growth and avoiding fiscal crises, and I’ve cited nations that have made progress by restraining government spending.
But what’s the best way of actually imposing such a rule, particularly since politicians like using taxpayer money as a slush fund?
Well, the Swiss voters took matters into their own hands, as I describe in today’s Wall Street Journal.
Americans looking for a way to tame government profligacy should look to Switzerland. In 2001, 85% of its voters approved an initiative that effectively requires its central government spending to grow no faster than trendline revenue. The reform, called a “debt brake” in Switzerland, has been very successful. Before the law went into…
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