A Solution to Our Debt Crisis: Is It time for Americans to adopt the Swiss debt brake?

As an economist, I have written extensively about the Swiss debt brake as a potential solution to the U.S. debt crisis. The United States is experiencing debt fatigue and must enact new fiscal rules to restore sustainable debt levels at both the national and subnational levels. The Swiss debt brake has proven to be the most effective set of fiscal rules in accomplishing this objective, cutting debt burdens in that country by half. The Swiss debt brake has been the model for more effective fiscal rules, adopted by European nations and the European Union.

The Swiss debt brake, whcih assures a balanced budget over the long term, has been effective in large part because it was enacted through initiative and referendum at the cantonal and national levels. An initiative incorporated the debt brake into the Swiss Constitution. Swiss citizens approved the debt brake overwhelmingly; about 85 percent expressed their support. Referendum and initiatives are direct-democratic institutions, which give Swiss citizens the power to vote on most important tax and expenditure decisions.

Although there are no provisions for a referendum at the federal level in the United States, there is a precedent for using direct democracy at the state level to control fiscal decision-making. In Colorado, for example, voters enacted the tax and expenditure limit through an initiative and incorporated it into the state’s constitution.

Changes at the federal level can only be made by federal law, which can easily be reversed, or through an amendment to the U.S. Constitution, which can be created by Congress or by an Article V amendments convention of the states. In either case, three-fourths of states must ratify the amendment for it to become law.

Tariffs have historically served a key role in the nation's foreign trade policy.Their purpose was to generate revenue for the federal government and to allow for import substitution industrialization (industrialization of a nation by replacing foreign imports with domestic production) by acting as a protective barrier around infant industries.[1]. They also aimed to reduce the trade deficit and the pressure of foreign competition. Tariffs were one of the pillars of the American System that allowed the rapid development and industrialization of the United States. The United States pursued a protectionist policy from the beginning of the 19th century until the middle of the 20th century. Between 1861 and 1933, they had one of the highest average tariff rates on manufactured imports in the world. However American agricultural and industrial were cheaper than rival products and the tariff had an impact primarily on wool products. After 1942 the U.S. promoted worldwide free trade.

An income tax, especially a tiered income tax is nothing more than blasphemy. What I mean by a tiered income tax is the harder you work the more you’re taxed within your countries borders. This money you’re taxed is then given to the government who then spend the money how they see fit. When your income is taxed you have no way to fight it as an employee or a business, which results in most people simply finding ways to work less hard or not working at all. Because in our current economic system income earners have their money taken away in many instances and redistributed to people and entities that don’t work as hard.

In a tariff based tax system, people are only taxed if they purchase foreign made goods. If you’re in Canada there are province to province tariffs also, so that’s an additional potential tax that consumers would pay however here’s the kicker when it comes to tariff taxes. The actual tax is paid by the businesses and then passed onto the consumers. Which in real terms equates to the consumers having a choice to pay or not to pay the tax.

American System that allowed the rapid development and industrialization of the United States. The United States pursued a protectionist policy from the beginning of the 19th century until the middle of the 20th century.

Let me update this.

The Chinese System that allowed the rapid development and industrialization of China. China pursued a protectionist policy from the end of the 19th century until the middle of the 21th century.

Debt CRISIS! I’ve heard this nonsense for DECADES!

Crisis:

“the turning point of a disease when an important change takes place, indicating either recovery or death.”

If the debt were a disease (many would argue it is an addiction and addiction is a disease) then we are at the “turning point” of “RECOVERY or DEATH”.

But we’ve been at this “recovery or death”, “turning point” for DECADES! and yet we’re very much alive.

Not only are we not “DEAD”, we just spent TRILLIONS on defense and TRILLIONS on coronavirus.

Hey, Chicken Little, no one believes you.

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