"At some point, holders of Treasury securities are going to recognize that these unfunded liabilities are going to affect the fiscal capabilities of the government and then you're going to have the same situation that happened in Greece happening in the U.S.," says Jeffrey Rogers Hummel, who is a professor of economics at San Jose State University and the author of a recent paper on the consequences of a U.S. government default. "In the short run it's going to be painful, but in the long run it'll be a good thing."
Reason's Nick Gillespie sat down with Hummel at FreedomFest 2012 for a wide-ranging discussion on monetary policy, business cycle theory, the longevity of the welfare state, and why libertarians who rail against the Fed are like "generals fighting the last war."
Held each July in Las Vegas, FreedomFest is attended by around 2,000 limited-government enthusiasts and libertarians a year. Reason TV spoke with over two dozen speakers and attendees.
For a growing playlist of interviews from FreedomFest 2012, go here:
About 14.30 minutes.
Camera by Tracy Oppenheimer and Alex Manning; edited by Jim Epstein.