How Government Debt Crowds Out Private Investment

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · Oct 22, 2026 · 9m · transcript

In this episode of The Fiscal Policy Podcast, Lucas and Luna explore the 'crowding out' effect in public finance. They examine how rising federal debt costs in October 2026 impact long-term interest rates and squeeze private sector investment opportunities. Using historical data from the late nineteen eighties and current Treasury yield curves, they discuss whether high government borrowing inevitably leads to lower corporate capital expenditure. The hosts analyze specific cases where state-level borrowing has constrained local infrastructure projects and offer a nuanced view on…