On the Verge of failure?
U.S. Economy "Close to a Destructive Tipping Point," Glenn Hubbard Says While there is a significant level of concern over the health of the US. The debate rages between economists and social scientists as to whether we should continue a Keynsian philosophy of stimulus spending or a more conservative notion of paying down debt and stop spending completely. ( a method of austerity if you will) The problem with either proposed solution- They both have the probability of failure. The question is, What is the correct solution?
Hubbard, dean of Columbia Business School, joined Dan Gross and I to discuss the "major structural imbalances" facing America, chief among them being the government's profligate spending. you may recall, was chairman of the President's Council of Economic Advisers during George W. Bush's first term. As you might expect, he is a strong advocate of smaller government and lower taxes. But Hubbard and Navarro, a business professor at UC Irvine, are also harshly critical of Bush's "gross mismanagement" of the fiscal stimulus bequeathed to his administration by President Clinton. Specifically, Hubbard chastises his former boss for the creation of a new unfunded federal mandate, Medicare Part D. But if Bush was a big spender, President Obama is "taking it to a whole other level," Hubbard says, citing the familiar critiques of ObamaCare and Financial Reform and "excess government spending" in general. In short, Hubbard believes Obama inherited a mess but has made it worse with nearly every one of his major policy initiatives and general governing philosophy. "We as a nation cannot resolve what have become deep and systemic structural imbalances in our economy simply by throwing more money and more and more regulations and more and more taxes at the problem," Hubbard and Navarro write.