How to Prevent Another Debt Ceiling Crisis: The ratio of federal debt to GDP Building a measure of economic growth into the measure for the debt ceiling would play to Republicans strong point: fostering robust growth by trusting and enabling private sector enterprise and innovation. Thats why Republicans should end their civil war and propose a bold alteration to the debt limit: the new measure would be the ratio of federal debt to GDP, a measure that would be a function not only of spending and taxation, but also of their growth effects. Lastly, the debates about where and how to draw the danger limit line (for the debt-to-GDP ratio) and how to prioritize spending programs would be lengthy ones, but would also be the most worthwhile debates on Capitol Hill in recent memory. Because the debt ratio would actually improve when the economy grew at a faster pace than the federal debt, debt-ceiling crises would become less frequent — especially if Congress prioritizes spending programs ahead of time and creates a mechanism for spending adjustments whenever their specified danger-limit debt ratio was breached. american/archive/2013/october/how-to-prevent-another-debt-ceiling-crisis
Posted on: Sat, 23 Nov 2013 23:47:28 +0000
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