The article argues that the Federal Reserve's recent rate hike decision, while justifiable on inflation grounds, highlights a critical lack of an underlying, transparent policy framework. The core problem is that the Fed's decisions appear discretionary, leading to market uncertainty because the committee's judgment, rather than clear data, dictates policy shifts. The author proposes that the Fed adopt a formal monetary policy rule—an algebraic formula linking the target rate to indicators like inflation and unemployment—to replace subjective guidance. Implementing such a rule would provide market predictability, enhance transparency, and shield the Fed from political attacks by making deviations from the standard easily quantifiable.
Offset Emergency Spending
English Summary
The article argues that Congress frequently exploits the 'emergency designation' loophole to bypass fiscal rules, leading to over $12.5 trillion in un-offset spending since 1991. It highlights that while countries like Switzerland and Germany successfully use 'debt brakes' to repay emergency borrowing, the US has seen its debt-to-GDP ratio surge due to a lack of similar enforcement mechanisms. To achieve fiscal sustainability, the author recommends adopting binding constraints that track and offset emergency spending through automatic, across-the-board reductions over a multi-year period.
中文摘要
本文指出，美國國會頻繁利用「緊急撥款」（emergency designation）漏洞規避財政規則，導致自 1991 年以來未經抵銷的支出超過 12.5 兆美元。報告強調，雖然瑞士與德國等國成功利用「債務剎車」（debt brakes）機制償還緊急借款，但美國因缺乏類似的執行機制，其債務佔國內生產總值（GDP）的比率持續攀升。為實現財政永續性，作者建議採納具約束力的限制措施，透過多年期的自動化全面削減，追蹤並抵銷緊急支出。
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