Does this economy need further stimulus?
I don’t think we can live on stimulus forever. Certainly, withdrawing it at too rapid a rate in such a fragile economy makes no sense. The real problem is that our system is so paralyzed it isn’t ableto be creative. The private sector is creative, but the government is just paralyzed. The tax system needs to be reformed. We need to have areas where we spend money, like infrastructure, education. There are other areas where we need to rein in entitlements—and everyone wants to keep what they have. We’re in this very static situation in a changing world, and it’s not a healthy one.
What’s a manageable level of debt for America, one that doesn’t impede growth?
Historically, when you start getting debt levels up at 90 percent and 100 percent of income, you’re in very rarefied air. And those debt levels have been associated with lower growth—not falling off a cliff, not Greece—but lower growth on a sustained basis. It can hold back your growth for decades. I think it’s hyperbole to say that the U.S. is going to become Greece. But it’s not hyperbole to compare us to Japan and wonder if we’d get stuck in this slow-growth quagmire.
Do you really think we’re at risk of stagnating like Japan?
Well, I’d say we’re in a mild version of it now. We need improvements and reforms. I don’t think spending money is the solution.