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).
4  See National Commission on Fiscal Responsibility and Reform (2010). BIS central bankers’ speeches  3  for reaching decisions about both shorter-term budget adjustments and longer-term changes. Fiscal policymakers could look now to find substantial savings in the 10-year budget window, enforced by well-designed budget rules, while simultaneously undertaking additional reforms to address the long-term sustainability of entitlement programs.