Latest / The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending
How Public Debt Crowds Out Private Investment
Episode 199 explores the often-overlooked mechanism of crowding out, where high government borrowing costs drive up interest rates for everyone else. We examine how rising Treasury yields impact small business loans and corporate expansion plans, using recent fiscal trends from late 2026 as our anchor. Lucas and Luna break down the difference between short-term liquidity shocks and long-term capital allocation shifts. You will learn why a fifty basis point increase in borrowing costs can stall a manufacturing plant’s expansion timeline. This episode avoids vague macroeconomic theory to focus…
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