Miller Center

Media Contact: Howard Witt, 434-924-6051

The 2009 Mortimer Caplin Conference on the World Economy

Governing Through Debt and Deficits

Over the past year, the global financial crisis has generated consensus in the U.S. and abroad that increased government spending is necessary to stabilize financial markets and stimulate faltering economies. But too little attention has been paid to the long-term fiscal consequences of governments' responses. The Congressional Budget Office recently revised its projection of the U.S. fiscal deficit upwards to nearly $2 trillion, or 12.5% of GDP—more than twice the record deficit of 6% set in 1983. Entitlement spending is expected to rise from its current level of 18% of GDP to over 32% by 2040. And America's creditors and trading partners have expressed grave concern over the long-term value of U.S. bonds and the prospect of rapid inflation. Yet these, and other, concerns have not produced a serious political dialogue about the consequences of governing in an era of debt and deficits. This is largely due to the fact that sharp ideological differences exist among parties and policymakers on the best way to approach politically charged issues such as entitlement spending and the tax code. The financial crisis and the widespread use of fiscal policy both at home and abroad provide an opening to ask these critical questions.

The 2009 Caplin Conference on the World Economy: "Governing through Debt and Deficits" will be the first conference hosted and organized by a major research university dealing specifically with fiscal policy. In keeping with the vision of the Miller Center as a forum for national discussion and dialogue, our approach to the Caplin Conference is to bring together representatives from the academy, the public sector and the private sector—three groups that often talk past, and not to, one another. Combining individuals from different fields with different expertise allows for a serious bipartisan discussion of the most significant issues facing the world economy today. These distinguished panels will deliberate over the problems confronted by U.S. states and their potential solutions; the consequences of rising deficits on America's standing in the world; the challenges of controlling health care costs; and strategies to build a constituency for reform. The conference will conclude with a roundtable discussion focused on America's fiscal future.

Official Conference Schedule

Downloadable Content

Video: WMV | H.264 MP4 | Audio: MP3

Session 1:  Difficult or Impossible? How Do We Govern through Debt and Deficits

While the federal debt and deficit tend to grab the headlines, the current fiscal crisis has hit state governments hard. Constrained by balanced budget amendments and differential taxable resources, state governments can serve as a microcosm through which to observe strategies for fiscal reform. Are tax and expenditure limits successful at the state level? What, if anything, can the federal government learn from the states' experience in dealing with tough budgets in tough times?

James AltJames Alt is Frank G. Thomson Professor and Director of Graduate Studies in Government, and a faculty associate of the Institute for Quantitative Social Science at Harvard University, where he was Founding Director of the Center for Basic Research in the Social Sciences.
Mark Hallerberg is Professor of Public Management and Political Economy at the Hertie School of Governance. He also maintains an affiliation with the Political Science Department at Emory University. He has done consulting work for the IMF, OECD, World Bank, Dutch Ministry of Finance, Ernst and Young Poland, and the European Central Bank.
Christian  KastropChristian Kastrop is Deputy-Director General and Director of Public Finance and Economic Affairs in Germany’s Federal Ministry of Finance.  He is also Chairman of the European Union’s Economic Policy Committee of the EU Finance Ministers Council.  Dr. Kastrop is a lecturer at the Free University of Berlin and the Hertie School of Governance Berlin.
David LassenDavid Lassen is Professor of Economics at the University of Copenhagen.  He has been a consultant to the World Bank, the Nordic Council of Ministers, and a number of Danish government agencies.
Mathew D. McCubbinsMathew D. McCubbins is a Distinguished Professor and the Chancellor’s Associates Chair in the Department of Political Science at the University of California, San Diego. McCubbins is also a Visiting Professor of Law at the University of Southern California.
Ray  ScheppachRay Scheppach has served as Executive Director of the National Governors Association (NGA) since 1983.  Prior to NGA, Ray worked for seven years at the Congressional Budget Office, serving the last two years as Deputy Director.  He is one of the country’s foremost experts on the role of government in the new economy.

Downloadable Content

Video: WMV | H.264 MP4 | Audio: MP3

Session 2:  A Global Challenge: Leading the World Economy in an Era of Debt

Growing fiscal deficits—especially those associated with policies of fiscal stimulus—are associated with expectations of higher long-term inflation. These expectations have dramatic consequences for global trade and investment. Increases in the money supply may have consequences for a nation's exchange rate, and fiscal spending directed at specific industries can run afoul of global trade agreements. This panel will discuss these issues and will ask if sustained debts hinder America's global economic leadership.

Paul Solman

Paul Solman is the business, economics and occasional art correspondent for The NewsHour with Jim Lehrer. He answers viewer questions on The Business Desk.  Recently, he has become a Fellow at Yale's Berkeley College and the Brady-Johnson Distinguished Fellow in Political Economy at Yale.

Paul Hobby

Paul Hobby is a founder of Genesis Park, L.P., a Houston-based private equity firm specializing in later stage investments. He currently serves as the CEO of Alpheus Communications, Inc.  In January 2009, he was named Deputy Chairman of the Houston Branch for the Federal Reserve Bank of Dallas.

Karen Johnson was Director of the Division of International Finance at the Board of Governors of the Federal Reserve System from 1998 to 2007. She joined the Federal Reserve Board as an economist in 1979.  Dr. Johnson also taught for six years in the Economics Department at Stanford University.

Arvind  Subramanian

Arvind Subramanian is senior fellow jointly at the Peterson Institute for International Economics and the Center for Global Development, and senior research professor at the Johns Hopkins University. He was previously assistant director in the Research Department of the IMF.   

Frank Warnock

Frank Warnock is Paul M. Hammaker Associate Professor of Business Administration at the University of Virginia’s Darden Business School; Research Associate at the National Bureau of Economic Research; Senior Fellow at the Federal Reserve Bank of Dallas’ Globalization and Monetary Policy Institute; and Research Associate at the Institute for International Integration Studies at Trinity College Dublin.

Downloadable Content

Video: WMV | H.264 MP4 | Audio: MP3

Session 3:  Dealing with Debt: Writing a Prescription for Reform

The Congressional Budget Office estimates that spending on the three major entitlement programs—Medicare, Medicaid, and Social Security—will grow from its present level of 18% of GDP to more than 32% of GDP by 2040. Gaining control of spending on these entitlement programs is a critical ingredient for our nation's future fiscal health. Bold initiatives have been proposed, ranging from increasing the retirement age to increasing the use of information technology and evidence-based medicine. While controversial, advocates of these proposals promise that spending will be controlled without sacrificing the social compact that is an integral part of American life. But can these proposals provide relief in the short term? In the long term? And even if they are promising in theory, are they politically feasible in practice?

Alan Murray

Alan Murray is deputy managing editor and executive editor, online, for The Wall Street Journal. He was previously assistant managing editor of The Wall Street Journal, and author of the paper's weekly "Business" column.  He has served as Washington, DC bureau chief for CNBC and The Wall Street Journal.

Alan Gerber is Professor of Political Science and Director of the Center for the Study of American Politics at Yale University. He currently serves as an editor of the Quarterly Journal of Political Science.

Eric Patashnik

Eric Patashnik is Professor of Politics and Associate Dean of the Batten School of Leadership and Public Policy at the University of Virginia, and Nonresident Senior Fellow at the Brookings Institution. His most recent book is Reforms at Risk: What Happens after Major Policy Changes Are Enacted (Princeton University Press, 2008). 

Thomas Rice

Thomas Rice is Vice Chancellor of Academic Personnel at UCLA.  He is also Professor in the Department of Health Services at the UCLA School of Public Health.  The third edition of his book, The Economics of Health Reconsidered, will be published in August 2009.  He served as editor of the journal, Medical Care Research and Review, from 1994 to 2000.

Jonathan  Skinner

Jonathan Skinner is the John Sloan Dickey Third Century Professor of Economics Professor, and a professor with the Dartmouth Institute for Health Policy and Clinical Practice, and Family and Community Medicine, at Dartmouth Medical School.  He is also a research associate with the National Bureau of Economic Research.

Downloadable Content

Video: WMV | H.264 MP4 | Audio: MP3

Session 4:  Consensus, Compromise or Crisis: The Politics of Policy Reform

Alan Murray

Alan Murray is deputy managing editor and executive editor, online, for The Wall Street Journal. He was previously assistant managing editor of The Wall Street Journal, and author of the paper's weekly "Business" column.  He has served as Washington, DC bureau chief for CNBC and The Wall Street Journal.

 C. Lawrence  Evans

C. Lawrence Evans is the Newton Family Professor of Government at the College of William and Mary, where he has been on the faculty since 1987. From 2003 to 2007, he was co-editor of the Legislative Studies Quarterly, the leading scholarly journal specializing in legislatures.

John Hilley

John Hilley served as Senior Adviser and Director of Legislative Affairs to President Clinton from 1996 to 1998. He was previously chief counsel for Senate Democratic Leader Tom Daschle, chief of staff for Senate Majority Leader George Mitchell, and majority staff director for Senate Budget Committee Chairman Jim Sasser. He was chairman and CEO of NASDAQ International from 1998 to 2003.  Hilley is the author of The Challenge of Legislation: Bipartisanship in a Partisan World (Brookings, 2008).

G. William Hoagland is Vice President of Public Policy for CIGNA Corporation.  From 2003 to 2006, he served as policy adviser and top budget aide to former Senate Majority Leader Bill Frist. He was Staff Director of the Senate Budget Committee under Sen. Pete V. Domenici from 1982 to 2003.

Francis E. Lee

Francis E. Lee is Associate Professor of Government and Politics at the University of Maryland, College Park.  She is author of Beyond Ideology: Politics, Principles and Partisanship in the U.S. Senate (University of Chicago Press, 2009).

W. Lee Rawls

W. Lee Rawls is Senior Counsel to the Director of the Federal Bureau of Investigation.  His prior positions include Chief of Staff to Majority Leader Bill Frist, Chief of Staff to Senator Pete Domenici, and Assistant Attorney General for the Office of Legislative Affairs at the U.S. Department of Justice. 

Downloadable Content

Video: WMV | H.264 MP4 | Audio: MP3

Keynote Address:  Alice M. Rivlin, Brookings Institution

Alice M. Rivlin

Alice M. Rivlin is Visiting Professor at the Public Policy Institute of Georgetown University and Senior Fellow in the Economic Studies Program at the Brookings Institution. She was previously Vice Chair of the Federal Reserve Board (1996—99), Director of the White House Office of Management and Budget (1994—96), and Founding Director of the Congressional Budget Office (1975—83).

Downloadable Content

Video: WMV | H.264 MP4 | Audio: MP3

Closing Roundtable:  Is the Day of Reckoning Upon Us? Charting America’s Fiscal Future

The present crisis provides an opportunity to address a number of often overlooked but critically important questions regarding the very nature of fiscal policy. This roundtable will draw on domestic and international experiences and ask how much can we afford to spend. Does the current crisis require a re-evaluation of the American social compact? Do domestic fiscal objectives require a rethinking of America's role in the world?

Margaret BrennanMargaret Brennan is an anchor and reporter for Bloomberg Television in New York.  Previously, Brennan was a General Assignment Reporter for CNBC and a contributor to NBC’s Today Show, Nightly News and MSNBC.  Brennan began her business news career at CNBC in 2002 as a producer for financial news legend Louis Rukeyser.
G. William Hoagland

G. William Hoagland is Vice President of Public Policy for CIGNA Corporation.  From 2003 to 2006, he served as policy adviser and top budget aide to former Senate Majority Leader Bill Frist. He was Staff Director of the Senate Budget Committee under Sen. Pete V. Domenici from 1982 to 2003.

Christian  Kastrop

Christian Kastrop is Deputy-Director General and Director of Public Finance and Economic Affairs in Germany’s Federal Ministry of Finance.  He is also Chairman of the European Union’s Economic Policy Committee of the EU Finance Ministers Council.  Dr. Kastrop is a lecturer at the Free University of Berlin and the Hertie School of Governance Berlin.

Thomas Rice

Thomas Rice is Vice Chancellor of Academic Personnel at UCLA.  He is also Professor in the Department of Health Services at the UCLA School of Public Health.  The third edition of his book, The Economics of Health Reconsidered, will be published in August 2009.  He served as editor of the journal, Medical Care Research and Review, from 1994 to 2000.

Alice M. Rivlin

Alice M. Rivlin is Visiting Professor at the Public Policy Institute of Georgetown University and Senior Fellow in the Economic Studies Program at the Brookings Institution. She was previously Vice Chair of the Federal Reserve Board (1996—99), Director of the White House Office of Management and Budget (1994—96), and Founding Director of the Congressional Budget Office (1975—83).

Ray Scheppach

Ray Scheppach has served as Executive Director of the National Governors Association (NGA) since 1983.  Prior to NGA, Ray worked for seven years at the Congressional Budget Office, serving the last two years as Deputy Director.  He is one of the country’s foremost experts on the role of government in the new economy.

Arvind  Subramanian

Arvind Subramanian is senior fellow jointly at the Peterson Institute for International Economics and the Center for Global Development, and senior research professor at the Johns Hopkins University. He was previously assistant director in the Research Department of the IMF.