Panelists shared a consensus that America’s debt does pose a risk to growth, but each offered context from their own research and experience. Olivier Blanchard made the case that if the United States is able to reduce deficits in the short term at no cost to economic output, it should do so. However, he cautioned that fiscal consolidation could cause a decrease in demand and action from the Federal Reserve to lower interest rates. This would be an undesirable outcome, he said, given that rates are already quite low. “I think we all want the Fed to have a bit more margin to play with,” Blanchard said, “so I think the conclusion for the U.S. is, in the absence of a recession, to decrease the primary deficits at a rate which does not put into question growth.”

Kent Smetters, who heads the Penn Wharton Budget Model, discussed his work to project the economic impact of fiscal policy. He argued that simply stabilizing the debt at current levels could have significant positive effects on growth. Smetters projected that stabilizing the debt-to-GDP ratio around its current level would lead to “sizable increases in GDP” of 1 to 3 percent. Relative to other fiscal policies, he said, debt stabilization is “the biggest kicker in terms of stimulating the economy.”

Beth Ann Bovino explained how America’s fiscal outlook affects our sovereign debt rating and, as such, our global strength. She said that while the U.S. dollar still enjoys a unique status as the world’s reserve currency, political dysfunction and rising debt are negative factors in measuring America’s creditworthiness. According to ratings assessments at her firm, the U.S. debt outlook received the lowest measurement possible: “We have a factor of one to six U.S. debt [is] the lowest. It’s six — can’t go lower than that.”

William Gale described his research on the economic challenges faced by the millennial generation, noting that many younger Americans came into the workforce at a time when the economy was in recession. This timing, he said, will “scar” their wages over time, with ripple effects throughout their careers. Additionally, he noted, because millennials are getting married, buying homes and having children later than previous generations, they are also starting to save for retirement later. “And if you know anything about retirement saving, you know that whenever you started you should've started sooner.”

James Poterba explained how larger macroeconomic factors like lower interest rates will also have an impact on the ability of younger Americans to save for the future. “When interest rates or rates of return are lower, that compounding works slower. You don't manage to gain as much from saving for many years. And this turns out to have a dramatic impact on the capacity to save for the long term,” he said.

Heidi Heitkamp discussed her work to engage young Americans on how their economic future will be affected by the nation’s fiscal outlook. Through an initiative called The Real State of the Union, Heitkamp works to “communicate to the next generation that they need to be involved … right now on fiscal issues, whether that's Social Security and Medicare, whether that's healthcare.”

Discussing the political landscape that contributes to inaction on many key issues, Lanhee Chen said, “it's not fun to talk about the challenges that we face. And in the political system, you have a misalignment of incentives.” He stressed the importance of injecting a future-oriented perspective into discussions about policy, especially during campaign season, to understand the implications not just for the next generation, “but generations beyond that as well.”

William Frey summarized the change America’s population is undergoing: “The main theme is that we're getting older, but the younger part of our population is becoming much more racially diverse.” Given trends in fertility, Frey said, “immigration is what’s keeping us growing at all.” America’s changing landscape has significant socioeconomic implications, as rising minority populations face disparities in areas including poverty and educational attainment. To meet this challenge, Frey said that “we need to have policies that focus like a laser beam on things like education, workforce, [and] childcare.”

Heather Hahn emphasized the intergenerational gap, and how it relates to priorities in fiscal policymaking. Currently, she said, “the federal government spends $6 for every senior compared to $1 for every child.” This disparity is “squeezing out” investments in everything else, and especially investments in children, she said.

Philip Jefferson identified technological change and globalization as playing outsized roles in the U.S. economy, with an especially great impact on income inequality. Connecting these trends to fiscal and demographic challenges, he said that when it comes to spending on seniors, “what's really important from the fiscal perspective is our capacity to pay for that spending. And what that depends on crucially is the number of workers that are in the economy who are working age and very productive, and paying into the systems that we use to support senior citizens.”

Drawing on the economic experience of her home state, Margaret Spellings highlighted Texas as a useful test case for dealing with a rapidly changing society on a large scale. She pointed to the contributions of the Hispanic immigrant community in Texas as a key factor in its business climate but emphasized the need to continue to invest in the future economy. “It’s possible and morally right to educate all children to high levels. And we're going to work hard at doing that.”

A special afternoon session brought together the authors of each plan for an interactive and engaging discussion about their policy choices, recommendations and tradeoffs across the budget, including reform proposals for healthcare, Social Security, discretionary spending, tax policy and more. While our fiscal outlook has deteriorated in recent years, making America's debt challenge even more daunting, these seven organizations proved that solutions do exist to manage that challenge.