US Productivity Imperiled By President's Budget And Escalating Debt

Today our productivity growth is imperiled by the anti-investment tilt of the president's budget plan for escalating federal debt. Even conservative estimates of effects of federal debt on interest rates (by Eric Engen of the Federal Reserve and me in the 2004 National Bureau of Economic Research Macroeconomics Annual) suggest that the last Obama budget blueprint would lead to a one-percentage-point rise in Treasury interest rates as the economic recovery takes hold. The consequence—lower business investment and real GDP 4% lower than it would otherwise be by the next presidential election—compromises our future.

From "Toward a Different Fiscal Future" R. Glenn Hubbard in the Wall St. Journal.

Mr. Hubbard is dean of Columbia Business School, and he was chairman of the Council of Economic Advisers under President George W. Bush.