If you want to know how not to handle a debt crisis, look at 18th-century France.

Every time Louis XIV, Louis XV, or Louis XVI fought a war, spending went way up, forcing the government to borrow. After the war, interest payments consumed most of the government budget, and the debt only continued to grow.

But the kings couldn't raise money effectively because the tax code had more holes than cheese.* There were loopholes for social groups and tax breaks for provinces, and the rich could literally buy government positions just to get tax benefits. France's finances were in such bad shape that in 1789 Louis XVI called the Estates General to meet for the first time in 150 years. After that meeting failed, public outrage at the special privileges helped launch the French Revolution.

That's right. The French Revolution was, to an extent, about tax loopholes.

[Kwak argues that, among other things, the mortgage deduction is not progressive.]