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U.S. Economy "Close to a Destructive Tipping Point," Glenn Hubbard Says

Posted Sep 28, 2010 07:30am EDT by Aaron Task in Newsmakers, Recession
"America is very close to a destructive tipping point," co-authors Glenn Hubbard and Peter Navarro warn in their new book Seeds of Destruction. "We must change how we conduct our politics and economics...or we will inevitably go the way of all once-great nations and suffer an irreversible decline."

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.

Hubbard, 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.

Stay tuned for additional segments from this interview where Hubbard discusses proposed solutions to many of our most intractable problems, including housing, the trade deficit with China and energy policy.

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419 comments

  • 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    fed up Wed Oct 06, 2010 05:27 pm EDT Report Abuse
    I figured some christian fanatic would post something stupid. I blame it all on the christians, GWB and Reagan.
  • 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    T.I.T.L. Wed Oct 06, 2010 05:09 pm EDT Report Abuse
    THIS MAN WORKS FOR BUSH....HE DID THEN AND HE STILL DO NOW...WHAT IS IT GOING TO TAKE AMERICA FOR YOU TO SEE THROUGH ALL THIS @#$%...BANECKE, WHAT EVER HIS NAME SHOULD HAVE BEEN THROWN OUT AND IN PRISON LONG AGO,,WHEN THEY FOUND OUT HE WAS HIDING @#$%.....THESE MEN SHOULD BE LOCKED UP...DO ANY OF THEM LOOK LIKE THEY ARE SUFFERING...GET RID OF THEM..ELECTION IS NEAR...I JUST PRAY IT IS A FAIR ELECTION...I DOUBT IT..
  • 1 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    doug Wed Oct 06, 2010 12:01 pm EDT Report Abuse
    Save America NUKE DC
    Problem solved :)
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    Scott Wed Oct 06, 2010 11:41 am EDT Report Abuse
    We need to move forward with the current budget until crisis forces the devaluation of the dollar, or, congress finds itself in an enviornment with overwhelming incentives to balance the budget. In the former scenario, more jobs will be created in the long-run as well as improving the diversity of job sectors. In the latter, the United States will sober itself and gain the goodwill of global citizens and thus improving confidence in the USA's monetary policies.

    Either way, we have obligations to the baby boomers (healthcare) as well as a global responsibility to maintain Western superiority in research and technology, paramountly in the area of warefare and medicines.
  • 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    Al Smith Wed Oct 06, 2010 08:17 am EDT Report Abuse
    Majoirty defecit due to SS & Medicare. I say govt should not manage Social Security & Medicare, this way uncle sam does not have to pick the bill. Management of the contributions should be done by individuals much like a retirement account (sure put stringent norms on acceptable investment categories).

    Additional defecit due to Government spending on war machine. I am thinking that US should not play world cop, good for the karma if people dont wish evil for a nation. The concept is simple "I have my own issues what makes me fit to handle someone elses? - lets swollow the ego pill and suggest that all nations are equal, I will not bring the rain, unless you cause me pain".
  • A Yahoo! User
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    A Yahoo! User Wed Oct 06, 2010 01:33 am EDT Report Abuse
    This is the best bull(#$%^) market ever.. Lets go liquidate our farm, houses, whatever, and buy up every single stock out there. Cos, they are all going to the moon.. Yeah, right..
  • 0 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 0 users disliked this comment
    ford Tue Oct 05, 2010 11:05 pm EDT Report Abuse
    United states and Europe can print money and basically get free oil because there is no limit as to how much they can print. They have done it and continue to do it. All the FED has to do is buy all the treasuries. All world banks are printing money, now it is time for Europe next maybe japan and so on. As long everyone is doing it the inflation is there worldwide. That is why hoses costing 100 dollars many years ago noww cost 200 K. They have always been printing but talk like this to stir up everybody.

    Just my rational.
  • 2 users liked this comment Please sign in to rate this comment up. Please sign in to rate this comment down. 1 users disliked this comment
    john Mon Oct 04, 2010 09:00 pm EDT Report Abuse
    When a nation turns its back on the God of the Bible it is doomed.

    The wicked shall be turned into hell, and all the nations that forget God. Psalm 9:17

    Neither their silver nor their gold shall be able to deliver them in the day of the LORD's wrath; but the whole land shall be devoured by the fire of his jealousy: for he shall make even a speedy riddance of all them that dwell in the land.
    Zephaniah 1
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    dan Mon Oct 04, 2010 03:04 pm EDT Report Abuse
    no more great mis-adventures!!---the best govt is a broke govt if all it does is war-monger!!--isreal got us to invade iraq and aghanstan and now the consequences are here!!--maybe isreal will help us pay our debt,you think??
  • A Yahoo! User
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    A Yahoo! User Mon Oct 04, 2010 01:10 pm EDT Report Abuse
    Massive Deficits and spending are a National Security threat Hillary Clinton said. This is another reason to vote "NO!" to more Bailouts, More Stimulus, and More TARP Bonuses.

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