The Swiss are renowned for crafting the finest watches in the world, such as the Patek Philippe. The Swiss are now credited with inventing the most effective fiscal rules in the world, the Swiss debt brake.
The debt brake was enacted as a constitutional fiscal rule through referendum in 2001, with support from 85 percent of Swiss citizens. Like many countries, the Swiss have encountered recessions accompanied by unsustainable growth in debt. The debt brake was enacted to impose more effective constraints on federal spending and restore sustainable levels of debt. Over the past two decades, the Swiss cut debt as a share of national income roughly in half.
In the United States, federal debt now exceeds national income, and the Congressional Budget Office projects that by midcentury, U.S. debt will be more than double our national income. We have much to learn from the Swiss…
