Thinking Hard About Government Debt, Steven Fazzari - Shared screen with speaker view
Don’t you need to distinguish between Federal government debt and state government debt when applying your assertions about public debt being less concerning than private debt?
Alana Bame
Can everyone make sure their microphone is muted please?
Timothy McBride
What role for federal reserve policy in interest rates in this, and expectations about future federal debt, and federal reserve policy?
Much has been said about the failure of wages/salaries to “keep up with” the growth in the economy, i.e., workers have lacked leverage to bargain for higher wages/salaries. Between 1978 an 2018, the typical worker’s compensation growth rate has been 12% (vs 940% for CEO compensation and 340% for highly compensated executives and 707% for S&P market companies). If compensation for the typical worker had grown more commensurately with the S&P, for example, what impact do you think that might have had on interest rates?
Timothy McBride
On this one… I largely agree with your take on government debt as you know. One issue that doesn't get much attention is the difference between "debt held by the public" which I think macroeconomists focus on (appropriately) and debt owed by government to itself. On the latter we owe $2.9 trillion to Social Security right now, the trust funds. And they are running a deficit too (will be running a deficit one the order of $100B to $200B per year over next 10 years). Federal debt is about $20 trillion. How do MACROeconomists look at the debt owed by government to ITSELF, the trust funds? A related problem – is one of the problems with running a big DEFICIT in the REST of government that we make it harder to pay for aging programs (Social Security, Medicare) which we should have predicted now will be rising in terms of spending? [My view: we knew this would happen with retirement of baby boom!]
Judging from Fed Chairman Jerry Powell’s public utterances (gently) encouraging more government spending, the Fed buys into your conviction that responsible ( not quadrillion level!)government debt is not highly risky for the long-term health of the U.S. economy.
Keith Guller
Will a change of government spending, (i.e. social policies, medical etc.) cause greater debt and less economical growth?
All the Nelsons
Has there been sufficient data on the productivity of debt? Data provided by economists like Lacey Hunt seem to argue that incremental debt is generating less incremental gdp. Is there reason to believe based on where debt is generally being allocated that this trend is set to stabilize or reverse? If not, would significant debt (beyond cbo expectations) be required to maintain nominal gdp growth?
Kate Warne
in your view does it matter what the federal government spends on? investment that raises productivity vs today’s consumption?
Nate Rogers
Where can I find the recording of this for future reference?
Steve, this has been one of our best presentations ever. Congratulations to you for these thought-provoking assertions….how do we reduce it to sound bytes that are more readily digested by a broader audience?
Timothy McBride
Totally agree Steve
Alana Bame
We will post the recording on the WC website “Events Recording” page once it’s ready.
Timothy McBride
key to solving Baby Boom issue for SS and Medicare is a strong economy. Period
Susan J Becker
would you please send an email link to the recording for everyone.
Keith Guller
I agree, this was/is a good presentations and would be nice to discuss further
Jonah Klein-Barton
Is there a practical difference in impact between debt that is used to finance programs which result in more money going to people with less wealth verses programs that give to people with more (assuming differences in marginal rates of spending/saving within groups)
Alana Bame
Once the recording is ready, we will send an email with a link to let everyone know.