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Hidden Forces

America’s National Savings and Debt Crisis | Lacy Hunt

Apr 1, 2024
Economist Lacy Hunt discusses America's national savings and debt crisis, the role of the US Treasury post-pandemic, declining net national savings rate, and the impact of the Fed's interest rate hikes on the economy. They explore the concept of neutral interest rates, fiscal deficits' effects on growth, importance of national investments, and government spending dynamics. Dr. Hunt analyzes inflation trends, CPI components, challenges in measuring housing values for accurate inflation prediction, and the complexities of interest rates, savings rates, and economic growth.
47:59

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

  • Negative net national savings rate hinders economic growth by limiting capital stock and investment opportunities.
  • Federal fiscal policy crucial for addressing savings rate and driving economic growth, requires political will and shared sacrifice.

Deep dives

Overview of the US Economic Situation

The global economy, particularly the US economy, is facing challenges with declining real per capita GDP growth rates, indicating a decline in standard of living. The negative net national savings rate is a critical issue, impacting economic growth and the production function by limiting capital stock and investment opportunities. This negative trend in growth rates is exacerbated by excessive debt levels triggering the law of diminishing returns.

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