05-13-2026
Economist Doug Holtz-Eakin warns that America is heading toward a fiscal cliff that will reshape family finances and the broader economy if policymakers fail to act.
Drawing on computational budget models, he explains that current U.S. borrowing trends simply “blow up” over time, forcing either massive future tax hikes or abrupt spending cuts. When Washington routinely borrows trillions, that capital is no longer available for research, worker training or business investment. It will slow productivity, wage growth and living standards for households. If investors eventually lose faith in U.S. debt, interest rates on mortgages, car loans and credit cards could spike, triggering a deep, decade-long downturn.
Holtz-Eakin is founder of the American Action Forum and a former CEA Chief Economist, Director of the Congressional Budget Office, senior adviser on Social Security and Medicare debates, and policy director for John McCain’s 2008 presidential campaign. He serves the Daniels School as a Distinguished Fellow.
Holtz-Eakin shared his insights while on Purdue’s West Lafayette campus after participating as a panelist at the Cornerstone for Business Roundtable with the Concord Coalition’s Carolyn Bourdeaux and former Purdue President and Indiana Governor Mitch Daniels.
Watch the video for his analysis:
