Harsh Predictions about the Future

I’m at a conference on the Council on Foreign Relations, looking back at the Great Depression and the New Deal.

One speaker is Ed Prescott, 2004 Nobel Prize winner. He said:

I do predict the U.S. will lose a decade of growth. Marginal tax rates will be increased. Productivity-depressing policies will be adopted.

When asked what we should do noww, he said (more or less exact quotes, based on my rapid typing):

Don’t subsidize inefficiency. Cut tax rates to get people to work more This financial stuff is much ado about nothing. I don’t see any reason for the taxpayers to bail out Goldman Sachs in a roundabout way. Let these businesses go bankrupt. They gambled, they lost. That’s part of life.

I’m not necessarily agreeing with him, but it’s an interesting position.

Before it's here, it's on the Bloomberg Terminal.