Nov. 16 (Bloomberg) -- As President Barack Obama and
congressional Republicans seek to resolve the so-called fiscal
cliff, the combination of automatic tax increases and spending
cuts scheduled for next year, a mutually agreeable solution is
lurking in an unexpected place: the 18th century.
In the 1700s, Great Britain had a debt burden that was even
more ominous than the $16 trillion the U.S. government now owes.
In 1716, Parliament proposed an ingenious, and fairly
uncontroversial, way to reduce this debt, called a sinking fund.
The scheme was copied 74 years later by the U.S. Congress. And
it could work just as well now as it did three centuries ago.
The sinking fund was the brainchild of Robert Walpole, who was
then the first lord of the Treasury and chancellor of the
Exchequer. Its purpose was to chip away at a national debt that
had swollen to 55 million pounds, which Parliament considered