My opinions about attempted and proposed solutions to the national debt:

Deficit ceilings
Deficit ceilings are problematic. They are problematic because they are directly attached to tax
revenue, which is related to GDP. Congress has no power to mandate a certain GDP level, so
they cannot completely control the deficit amount (Adkins, n.d.).
Discretionary Spending caps
Spending caps have the advantage of not being attached to GDP or federal revenues. These
could be effective, if they were enforced. They have not been enforced, though, because
politicians dont want to face the potentially unpopular consequences (Kohut, 2012).
Discretionary spending caps could be hurtful if they are not adjusted to reflect the growth of the
economy. Discretionary spending includes much of our defense and non-defense investment
spending (CBO, 2011). I call it investment spending because spending in areas such as
education and infrastructure provide future benefits. On the other hand, many of our mandatory
spending is on consumption programs like Social Security, Medicare, and Medicaid (Adkins,
n.d.). This kind of cap would curb investment on future economic growth, while not addressing
the consumption spending programs.
PAYGO
PAYGO is a nice idea. Requiring congress to increase taxes or cut spending in other areas to
compensate for any spending increase or tax cut. In other words, it would fix the operating
budget for the United States, at or below its current level. If GDP continued to grow then the
deficit would continue to shrink. However, this could require deep and unexpected cuts to many
programs during war times and recession. This program also has the same enforcement
problems as spending caps.

Sequestration
Between 1986 and 1991 five sequesters were triggered, but all but one (1986) were rescinded.
Sequestration was meant to give the congressional budget rules teeth. The problem appears to
be that congress has power to have those teeth removed whenever a majority dont feel like
being bitten by them (which is apparently fairly often).
Debt ceiling
Debt ceilings might be a good option, if they could be enforced. Like spending caps a debt
ceiling is not directly connected to GDP or tax revenue. However, as stated in the essay prompt,
every time we are about to hit a debt ceiling congress simply raises it (Magnusson). As long as
congress has power to raise the ceiling, and their constituents want it raised, then they will raise
it. Another problem with debt ceilings, presuming they could be enforced, would be the fact that
congress would probably keep the debt very near the ceiling. This would be fine, except in times
of war or severe recession. The effect would be similar to a balanced budget requirement (I will
discuss potential issues with the enforcement of this later).
Balanced Budget Amendment
The Balanced Budget Amendment is a popular idea. However, a balanced budget on a national
level may not be a good idea. The first reason is that it would make war finance very difficult.
The second problem is that it is pro-cyclical. The federal government would still be able to curb
cost-pull inflation. However, the economy would suffer deeply in a recession. The government
tax revenues decrease in a recession, this would require spending cuts when the economy is
already suffering. Another problem is the fact that it is impossible to accurately predict GDP and
the corresponding tax revenue, and so the budget could not be balanced until the end of the year.
Would any of this work?

Whether any of this could work is uncertain. Many of these things have yet to be truly tried
because of a lack of enforcement or support.
Why or why not? What is your opinion is the answer to this rising debt problem?
Canada faced a nearly double-digit budget deficit in the 1990s. By instituting deep budget cuts
(20% or more within four years), the nation reduced its budget deficit to zero within three years
and cut its public debt by one-third within five years. The country did this without raising taxes
(Smith, 2013).
In my opinion the best way to stop the rising debt is to stop spending so much. The difficulty is
creating a political environment that will allow for spending cuts. Congress and the Senate are
all answerable to the people for re-election. Popular appeasement is job security for them. We
need to take control out of the hands of people who have so much to fear about popular opinion,
and more interest in the public good. I cannot answer the question how. One idea that comes to
mind is repealing the 17th amendment, so that state legislatures (who are hopefully more
informed about economics) elect the senate. Although, I cannot find any evidence to support this
opinion. I am hopeful that my readers will be understanding in my answering, I dont know. I
dont know how to force Congress to follow its own rules, short of a constitutional amendment
enforceable by the courts (with unknown consequences). I dont know what an effective
constitutional amendment could contain to avoid crashing the economy and creating perpetual
pro-cyclical effects. However, I feel that the question of how to lower the national debt and
deficits is more fundamentally a political problem than an economic one. Economists may be
able to intellectually solve the national debt and deficit problems, can they enforce those
solutions though? Can they get the solutions past a congress who is afraid that they will lose their
jobs if they make an unpopular decision? I am doubtful that any of this could be done in our

present situation. In the famous words penned by Thomas Jefferson in the United States
Declaration of Independence, All experience hath shewn, that mankind are more disposed to
suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they
are accustomed. In other words, I believe that a change in the trajectory of the national debt
will only be a possibility when the burden of the national debt becomes greater than the pain of
abolishing the forms to which [we as a nation] are accustomed.

References
Adkins, T. (n.d.). What The National Debt Means To You. Retrieved from
investopedia.com:
http://www.investopedia.com/articles/economics/10/national-debt.asp
Kohut, A. (2012, June 14). Debt and Deficit: A Public Opinion Dilemma. Retrieved
from Pew Research Center: http://www.people-press.org/2012/06/14/debtand-deficit-a-public-opinion-dilemma/
Magnusson, K. (n.d.). Reining in the National Debt. Salt Lake City, Utah, USA.
Congressional Budget Office. (2011, August 8). Discretionary Spending Under the
Budget Control Act of 2011. Retrieved from Congressional Budget Office:
https://www.cbo.gov/publication/42214
Smith, L. (2013, November 22). Successful Ways That Governments Reduce Federal
Debt. Retrieved from investopedia.com:
http://www.investopedia.com/articles/economics/11/successful-waysgovernment-reduces-debt.asp