Chat With Deputy Director of National Economic Council

We've just been joined by Keith Hennessey, Deputy Director of the National Economic Council, to discuss the state of the U.S. economy.

Some highlights:

• Long-term productivity growth rate is forecasted to be 2.6%, meaning standards of living will double roughly every 27 years, far faster than in the past.
• On the ability of specific energy policies to prevent or mitigate shocks (both natural and geopolitical): important steps include importing more LNG, make good use of the strategic petroleum reserve when shocks do occur, develop contingency plans with friendly supplier nations as were used post-Katrina.  Broadly speaking, control and prevent shocks when possible, but insure against and plan for them, since they're inevitable.
• On tax cuts and budget reform: the underlying problem is an entitlement spending problem
• On Medicare, not much more that can be said.  But there may be more to say soon.
  • The problems aren't limited to actual entitlement spending, but also involve the inefficient flow of information and market signals, constrained by government programs.