Harvard's Feldstein Says Debt to Reach 100% of GDP by End of Decade

The video discusses the growing US deficit, its impact on GDP, and the potential consequences for interest rates and the economy. It highlights the lack of foreign investment in US debt and the political divide on addressing the deficit. The discussion also covers the implications for the equity market and potential long-term solutions, including changes to entitlements and tax policies.

What is the expected impact of the burgeoning US deficit on long-term interest rates?

• They should decrease significantly.

• They should have no impact.

• They should remain stable.

• They should increase significantly.

How has the global investment in US debt changed recently?

• It has decreased slightly.

• It has increased significantly.

• There has been no net buying by the rest of the world.

• It has remained the same.

What is one potential effect of higher long-term interest rates on the equity market?

• No change in equity valuations

• Suppression of equity valuations

• Increased supply of equity in the market

• Increased equity valuations

What tax policy change in 2017 affected corporate debt utilization?

• Increased tax incentives for debt

• Introduced new taxes on equity

• Disincentivized debt through the tax code

• Eliminated taxes on corporate debt

What is identified as the real problem behind the long-term US deficit?

• Military spending

• Discretionary spending

• Infrastructure spending

• Entitlements

What historical policy change is suggested as a model for addressing current entitlement issues?

• The 1986 Tax Reform

• The 1983 Social Security reform

• The 2001 Tax Cuts

• The 1990 Budget Agreement

What is the suggested solution for the increasing life expectancy affecting Social Security?

• Privatize Social Security

• Increase taxes on the wealthy

• Reduce benefits for all

• Raise the age for full benefits