Somewhere along the line our country has fallen into a pattern in which running large budget deficits has become our normal operating procedure. This means that most years in recent memory we’ve spent much more in government programs than we are willing to raise in tax revenues. We’ve then borrowed money to cover the balance. The result is a mammoth and growing federal debt that is now approaching $12 trillion — growing even more rapidly because of our nation’s current economic difficulties, rapid health care cost growth and tens of millions of baby boomers on the verge of retirement. (Find out more about our "Choicework" discussion guides, or download the PDF version of this choicework guide).


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Choice 1

Establish a Zero-Tolerance for Deficit Spending
  • Pass strict “pay-as-you-go” legislation: This means that if a spending bill is passed the expenses associated with that spending bill are directly offset by spending cuts elsewhere in the budget and/or by tax increases.
  • Citizens groups should organize in support of “pay-as-you-go” legislation and to ensure that politicians who attempt to create exceptions to this rule are held accountable.
  • Work for a Balanced Budget Amendment. Of course, it’s hard to pass constitutional amendments, but it might be achievable over time and meanwhile it’s a good way to educate people.

Arguments for:

  • This not only sends a clear message that deficit spending is unacceptable and won’t be tolerated, it puts mechanisms in place that to make deficit spending much more difficult.
  • This brings the government into line with the reality that businesses and families have to deal with every day: your spending has to be in line with your income.

Arguments against:

  • This is an overly rigid approach to governance that will not allow us to respond effectively to unexpected events like the next Hurricane Katrina or another terrorist attack.
  • This kind of strict budgeting may get our finances under control, but will also mean putting off crucial investments in health care or education.


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Choice 2

Limit Deficit Spending to Responding to Dire Emergencies Only
  • Create a “rainy day fund” for modest emergency spending needs so we only have to borrow for major emergencies.
  • Require a two-thirds “supermajority” vote in Congress to borrow money for major emergencies that the rainy-day fund can’t handle.
  • Institute serious “sunset provisions” so that any emergency borrowing that occurs has to be renewed regularly and transparently, also by a “supermajority” vote.

Arguments for:

  • Allowing no discretion to borrow in an emergency is like saying a family should not take out a second mortgage, even if they can afford the payments, to help a family member receive critical care for a catastrophic illness.
  • Given the amount of debt we already have now and given the challenge to a sound national budget posed by the baby boomers as they begin to retire, emergency borrowing is the only kind that ought to be permitted.

Arguments against:

  • Borrowing to cover emergencies is a slippery slope toward gaming the system and ending up back where we started.
  • This approach limits borrowing to dire emergencies, but nations need to be able to engage in occasional, responsible borrowing in order to remain competitive and promote the common good.


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Choice 3

Permit Responsible and Limited Borrowing to Make Critical National Investments
  • 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.

Arguments for:

  • Sometimes it can be worthwhile to borrow if that’s what it takes to make critical investments in areas like science and technology, health care and national security. These are the kinds of critical investments that stimulate economic growth or prevent catastrophes that hurt it.
  • Just because the government hasn’t learned to borrow responsibly in the past doesn’t mean we can’t put mechanisms and practices in place, such as those suggested above, that allow us to take a more disciplined approach to responsibly borrowing for critical investments only.

Arguments against:

  • If borrowing for emergencies is a slippery slope, this slope is more slippery yet. The only way to really control government spending is to have a zero-tolerance for debt and set tough rules that can’t be broken.
  • This approach might be OK down the road if we’re able to bring our national debt down significantly, but until we do that any significant borrowing is dangerous to our national well-being.


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