12/15/2009 - The US is heading for a public debt crisis unless action is taken soon to stabilise debt relative to national income, a bipartisan group of former congressmen, White House officials and budget experts warned yesterday.
"There is a real crisis looming," said Bill Frenzel, a former Republican ranking member of the House budget committee. Jim Jones, a former Democratic chairman of the committee, said there was no way of knowing when a market backlash might materialise.
The group, known as the Peterson-Pew Commission, called on Democrats and Republicans to agree on a binding debt to gross domestic product target of 60 per cent by 2018. Under the plan, an enforcement mechanism would impose spending cuts and a tax surcharge if Congress failed to achieve the target in 2018 and each year beyond.
Read the full article Washington Warned of Crisis Unless Debt is Stabilised on the Financial Times' Web site.