PARTICIPANTS
Glenn Hubbard, Michael Boskin, David Brady, John Cogan, Paul Gregory, Chad Jones, Tim Kane, General James Mattis, David Mauler, John Raisian, Josh Rauh, George Shultz, John Taylor
ISSUES DISCUSSED
Glenn Hubbard, dean and Russell L. Carson Professor of Finance and Economics at Columbia Business School, reviewed his recent book with Tim Kane, Balance: The Economics of Great Powers from Ancient Rome to Modern America.
Hubbard first qualified his discussion by insisting the book was not intended to convey a modern-day declinist point of view. Broadly, the authors examine a number of historical case studies where powerful economies eventually collapsed. The authors attempt to uncover causes behind this repeating pattern that might provide insight into how the United States can avoid a similar fate.
Previous scholars have often focused on external forces as causes of economic demise. However, Hubbard argued that economic decline happens as a result of institutional problems and never occurs as a sudden stop. Interest-group politics focuses on self-interest instead of growth and often creates perverse fiscal policy that advantages the present at the expense of the future. Common to each case study was excessive debt.
Hubbard concluded by mentioning his proposal (joint with Tim Kane) calling for a budget amendment that places a limit on government expenditures. A seven-year inflation-adjusted moving average of prior revenues would determine this limit. Supermajorities in Congress could allow for exceptions.
