How Public Debt Crowds Out Private Investment

The Fiscal Policy Podcast with Fexingo: Government Budgets, Stimulus, and Public Spending · Sep 14, 2026 · 11m · transcript

We drill into the mechanics of crowding out — why high government borrowing can raise interest rates and squeeze private sector access to capital. Using the ten-year Treasury yield as a benchmark, we examine how fiscal deficits impact corporate bond markets and long-term infrastructure financing. Lucas and Luna break down the trade-offs between public stimulus and private investment efficiency, offering listeners a clear look at the opportunity costs of today's spending decisions.

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