Al “not Glenn” Hubbard Addresses the Press
Daniel Gross, Mark Thoma, Brad DeLong hammer Mr. Hubbard for apparently not knowing that Federal debt stands at $8.1 trillion. His overall performance was much worse than that:
Actually, again, I don’t know what numbers you’re using, but the current budget debt is not a problem, but we do not want it to grow as a percentage of the GDP. That’s the way you want to look at it, is the debt as a percentage of GDP.
He does not want the debt to grow as a percentage of GDP? Might I suggest he call the Council of Economic Advisors and request table B.79 of the Economic Report of the President? The following chart shows the debt/GDP ratio from 1981 to 2006 (projected). I started with 1981 to show the dramatic increase in this ratio that was the result of the last time we tried the free lunch philosophy of spend and borrow fiscal policy. We did manage to reverse the prior escalation of debt during the 1990’s in part by spending restraint but mainly by increasing taxes. Notice that Bush43’s fiscal fiasco has debt growing faster than GDP, which is not going to change until this Administration dramatically changes its fiscal stance. Kash provides a very nice historical context on spending and taxes that I suggest Mr. Hubbard review.
Mr. Hubbard was asked about the fact that wages are not keeping pace with inflation – and he replied with something that sounded like he was not prepared:
Well, with respect to wage growth, obviously the problem there is compensation growth continues to — the compensation for the American worker continues to grow. Wages, particularly for lower-income people, have not grown, and the reason they haven’t grown is because a bigger and bigger portion of their compensation is going for benefits, especially health care. And that’s why it’s so important that this country tackle the escalating costs of health care. The other thing that’s so important to growing wages is productivity growth. And that’s one of the — if you guys are looking for something to talk about in the economic area that really is never talked about, I would encourage you to talk about productivity growth.
The problem is there is compensation growth? People are not talking about productivity growth? I’ll give Mr. Hubbard partial credit for mentioning health care costs, which Kash has contributed several posts. I know Mr. Hubbard is a busy person, but might I suggest he consult with the various economist blogs who have been discussing the fact that compensation growth has been less than productivity growth.