Historical Follies Set the Stage for Out-of-Control Debt

A new commentary in American Enterprise Institute’s journal, The American, highlights a seemingly “perfect storm” of historical events that have facilitated the out-of-control spending of the last half a century.

The author does note that while the percent of public debt to national GDP is comparable to other developed nations such as France and Japan, the rate at which our debt has been accelerating is at an unprecedented level. History points at four occurrences that ushered in this new era of deficit spending: the economic turmoil of the Great Depression, the emergence of Keynesian economic policy, the political fundraising reforms passed after the Watergate scandal, and the inability for the President to line-veto spending bills.

While the current spending situation may look dire, AEI provides suggestions to start taking in the reins in our spend-happy Congress such as repealing the Budget Control Act of 1974, which took away the President’s ability to impound allocated funds, and a limit on Congressional spending.

Check out Commonwealth Foundation’s recommendation for spending limits here in Pennsylvania