To prevent public debt from soaring in the wake of the global financial crisis in 2009, Germany has enshrined a “debt brake” in its constitution. The debt brake sets strict limits on federal public debt levels and restrains government borrowing.
The United States is on a fiscal collision course. Projected spending, deficit, and debt levels are highly unsustainable and are growing automatically due to statutory rules and structural demographic and programmatic factors. Absent presidential and congressional leadership through the regular budget process, fiscal restraints are necessary to invoke reforms to out-of-control federal spending and borrowing and to avert a severe fiscal crisis in the United States. Existing U.S. institutions and budget procedures are inadequate for addressing current and future fiscal pressures.
The takeover of Credit Suisse by UBS is a mammoth task for all involved. The federal government is now hiring consultants to help it with its part of the deal.