Clear metrics are important, together with triggers or other mechanisms to establish the credibility of the plan. For example, policymakers could commit to enacting in the near term a clear and specific plan for stabilizing the ratio of debt to GDP within the next few years and then subsequently setting that ratio on a downward path.
Indeed, such a trajectory for the ratio of debt to GDP is comparable to the one proposed by the National Commission on Fiscal Responsibility and Reform.4 To make the framework more explicit, the President and congressional leadership could agree on a definite timetable  3  Some evidence that interest rates can rise in response to even a short, temporary period during which the Treasury cannot make payments on a relatively small amount of maturing securities is presented by Zivney and Marcus (1989).