Opinion
The Weekly Standard

How to Pay Down the Debt

James Pethokoukis –
Mon May 10, 3:55 pm ET

Washington (The Weekly Standard) Vol. 015, Issue 33 - 05/17/2010 – A death panel for the national debt? Please. Even members of the National Commission on Fiscal Responsibility and Reform seriously doubt whether they can construct a "grand compromise" on taxes and spending. America isn't Greece (yet). Not enough sense of impending doom. President Barack Obama's bipartisan, all-star team of budget hawks might have to settle for merely educating Americans on the financial black hole slowly enveloping the U.S. economy.

Yet before newspaper editorial pages predictably bemoan a "broken Washington" where Democrats won't reform entitlements and Republicans won't embrace a value-added tax, they should consider this: The "slash and tax" approach has a poor record of success globally. Since 1980, some 30 debt-plagued nations have tried to reduce their indebtedness through such austerity measures. In practically all cases, according to a new study by financial giant UBS, the increase in national debt was only slowed, not reversed, by such policy pain.

Then again, broad tax increases on the middle class and snipping the safety net like a bonsai tree aren't the only possible fixes out thereâ€â€