Instead of treating the federal deficit purely as a numbers problem solved by tax hikes or spending cuts, prioritize policies that raise total factor productivity and GDP (high‑skill immigration, housing supply, cheaper energy, child development and R&D). Small, sustained productivity gains materially lower the debt‑to‑GDP ratio over decades and produce additional taxable income that eases fiscal pressure without immediate austerity.
— Framing deficit policy around growth/productivity changes the political choice set and offers non‑zero‑sum solutions that align fiscal responsibility with liberal equity goals.
Zachary Liscow
2026.10.29
100% relevant
Zachary Liscow’s piece cites the U.S. publicly held debt (~$32 trillion), a FY2026 ~$2 trillion shortfall, and a claim (from his recent paper with Elmendorf and Hubbard) that raising productivity by 0.5 percentage points annually would stabilize the debt‑to‑GDP ratio within decades and lower it by ~42 percentage points.
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