I don’t know for sure, but I suspect that the main reason we don’t have a Chilean or Swedish style BBA is that our BBAs have mainly ben designed for show. No one expects them actually to be enacted. In that regard, the failure of the most recent version is typical. A Chilean or, even more, Swedish type system requires a commitment to follow the rules regardless of the party in power. Both countries’ fiscal rules have, in fact, survived changes in government from left to right and back again. I do not think, though, that the United States has the necessary political maturity at this point in its history.

With regard to your second question, see my detailed explanation in this earlier post: http://archive.economonitor.com/dolanecon/2012/11/28/what-does-it-mean-for-fiscal-policy-to-be-sustainable-mmt-and-other-perspectives/

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Economist, Senior Fellow at Niskanen Center, Yale Ph.D. Interests include environment, health care policy, social safety net, economic freedom.

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