Perspective detail: How to Run Our Government Without Piling Up Too Much Debt

Perspective 3: Permit Responsible and Limited Borrowing to Make Critical National Investments

There can be good reasons for the government to borrow, just as there are good reasons for those who can truly afford to pay a mortgage to buy a house. The nation should, for instance, be able to make investments in things like maintaining roads and bridges, preventing and preparing for disasters, education, and researching preventive medicine and new technologies vital to our economic competitiveness. The point is to control irresponsible and excessive debt while permitting a reasonable amount of responsible borrowing that serves the nation well.


Therefore, we should:

  • Require the government to budget for the long-term. Instead of annual budgets, the government should plan for two years at a time and have a long-term plan for paying off its debts.
  • Change the government’s budget procedures to more closely follow state governments and business. Most organizations have a separate “capital budget” for big projects and long-term borrowing, where debts can be weighed against their benefits.
  • Set caps for increases in both taxes and spending that limit debt. We should limit increases in the federal budget to the rate of inflation, or some other percentage that lets government grow slowly so debt is kept under control.

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