redstate.com During this election campaign, neither political party has proposed a viable solution to our debt crisis. Total federal debt now exceeds our national income and the Congressional Budget Office projects that debt will increase to more than double national income by midcentury. As the debt burden increases, the nation is increasingly exposed to debt default that would have a devastating impact on financial markets. Before we fall over this fiscal cliff we should learn from the experience of other countries, such as Switzerland, which have had success in solving their debt crises.
In the early 1990s, Switzerland experienced a debt crisis not unlike the debt crisis that we now face. Swiss citizens responded by incorporating a new fiscal rule, the debt brake, in their Constitution through referendum with support from 85 percent of voters. The debt brake requires the federal government to bring expenditures into balance with revenues in the near term and caps the rate of growth in federal spending at the long-run rate of growth in national income. Debt brakes have been incorporated in cantonal and municipal constitutions as well as the federal constitution. The debt brake has allowed the Swiss to stabilize and reduce debt relative to national income in the long term.
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