Martin Feldstein predicts slugish growth

Martin Feldstein has predicted recently that we will see a protracted period of sluggish growth and potentially lower standards of living... “Large fiscal deficits would mean that the government must borrow funds that would otherwise be available for private businesses to finance investment in productivity-enhancing plant and equipment...Without that investment, economic growth will be slower and the standard of living lower than it would otherwise be. Moreover, the deficits would mean higher interest rates and continued international imbalances.”

When the federal government competes with the private sector for funds, it always wins out. The
private sector is not capable of competing with the federal government. They do not compete on an equal footing. It is a very short view of the market that causes the market to hold up under these circumstances...