Swiss Debt Brake
Swiss Spending Cap Continues to be Successful
by Stuart MacPhail July, 2019
Over the past few years this publication and several others have extolled the virtues of “The Swiss Debt Brake” as a model for injecting fiscal responsibility into America’s national fiscal policies.
Dan Mitchell of International Liberty has posted a review of the national spending-cap program Switzerland imposed on itself 15 years ago. He notes that “Before the law went into effect in 2003, government spending was expanding by an average of 4.3% per year. Since then it’s increased by only 2.6% annually.”
He recently updated his calculations using IMF data. “Looking at the numbers from 2003-2018,” he says, “[Swiss] government spending has grown by an average of 2.1 percent per year since the debt brake went into effect.” In other words, the policy is becoming more successful over time.
Mitchell uses three charts to show that while debt levels have jumped in other industrialized nations, the level of red ink in Switzerland has declined, and while other European nations have experienced fiscal crisis and ever-increasing amounts of debt, “Switzerland has been an island of budgetary tranquility.” Read his review HERE.