Germany implemented a fiscal sustainability plan similar to the Swiss Debt Brake in 2009 to reign in excess spending. The German Finance Minister reported on Marcy 7, 2023 that the country “is sticking with it.” Former Magna International CEO Frank Stronach sounded the alarm on Canada’s rising national debt calling it a “ticking timebomb on future generations.”
As a global power, one would expect the U.S. to lead efforts to limit uncontrolled spending. Back in 2019 Adam Brandon, CEO of Freedom Works, wrote “A Swiss debt brake would force spending prioritization by law, forcing otherwise unwilling politicians to finally make the tough decisions. Congress has kicked the can down the road on this issue for too long. It’s time to make sure they can’t kick it any further.”
Fast forward to 2023 and President Biden and Congress are still “kicking the debt can down the road.” Barry W. Poulson, a policy advisor with The Heartland Institute and Federal Fiscal Sustainability Foundation board member, provides insight into how Colorado incorporated a Swiss Debt Brake solution to tackle uncontrolled spending. An excerpt from his Op-Ed “Colorado’s Budget Solution” published in “American Thinker” follows: “But Colorado citizens solved the commitment problem through a citizen initiative that incorporated the Taxpayer Bill of Rights (TABOR) in the Colorado Constitution. For three decades, the TABOR amendment has constrained the growth in state revenue and spending while enabling the Legislature to balance the budget. If any unit of government in Colorado wants to increase taxes or issue new debt, it must have voter approval. Colorado citizens continue to receive tax rebates from surplus revenue above the TABOR limit. Despite efforts to water down or abandon TABOR, it remains the gold standard for state fiscal rules. The experience with TABOR in Colorado demonstrates how citizens can use constitutional fiscal rules to solve the commitment problem. Since TABOR was enacted, Colorado has created one of the best business tax climates and experienced one of the highest rates of economic growth in the country. TABOR turned Colorado into a little Switzerland. “Click here to read Mr. Poulson’s entire Op-Ed.