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Q&A on SAVEGO with Dr. Joseph Minarik

Why did we choose to target an explicit amount of annual budget savings, rather than the actual ratio of the debt to the GDP?

The basic reason is that annual budget savings can be controlled directly by the Congress through the enactment of spending bills and changes in tax and entitlement legislation.

Because the Congress can control that objective, it can be held responsible if it fails to meet it. By contrast, neither the debt nor the GDP can be controlled by act of Congress. Both are affected by the ups and downs of the economy, wars, natural disasters, and other factors outside direct congressional control. If the Congress is whipsawed by uncontrollable factors, it will waive the law, and the process will lose credibility and break down.

2011-04-20 00:00:00

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