FISCAL INCONTINENCE.

In Reason, Veronique deRugy notes, "Lawmakers have to show they'll back the national debt with future fiscal surpluses, which means reining in government spending."  That echoes the ancient Keynesian policy prescription of balancing the federal budget over the business cycle, which back in the day came bundled with the idea that a fiscal policy so conceived could help fine-tune the economy, with the deficits mitigating the pain in downturns and the surpluses putting a check on investors and consumers during expansions.

The professor is considering a few things that the simple income-expenditure model of sixty years ago overlooked.

Congress and subsequent ones must do their part. Parker Sheppard, senior fellow at the Fiscal Lab on Capitol Hill, spells out two ideas.

First, Congress should commit to a credible deficit target and restore the expectation that it will keep future debt sustainable. As Sheppard notes, "deficits are running at 6 percent today, and 3 percent is a level Congress has hit repeatedly." True, trimming deficits by half will be a serious political challenge. But considering the political challenge that inflation represents, it is worth doing.

Second, Sheppard argues that the Congressional Budget Office should include debt-service costs when it scores legislation. As things now stand, a bill can spend money in year two and offset it in year nine, and the score comes out balanced. Legislators then vote on proposals priced as if this costs us nothing. But those seven years of borrowing are not free. The Treasury pays interest on every dollar in the interim, and at current rates, it's significant money that the score never shows.

Economic growth helps too. Removing regulations that stand in the way of investment and work is valuable on its own merits, but it also helps with fiscal finances. The resulting revenue expands the government's capacity to service its obligations at the margin and lessens inflationary pressure.

All of this is worth doing, though it won't save us from the need to reform entitlement spending. Some 70 percent of the federal budget consists of mandatory spending, and the entire projected increase in the deficit comes from Social Security and Medicare. Entitlement reform is what we should be aiming for.

It's hard for Congresses to credibly commit themselves to anything, Congressional Budget Office scoring almost always leaves something out for somebody to grouse about, and the absence of any dynamic scoring these days lets the people who cheerlead for growth carry on about all sorts of things.  On the other hand the going concern value of the United States might make bond holders less eager to unload Treasuries than they might be if it's Iranian or Russian government borrowing which might defer the crash.  It might be wise to buckle in all the same.