Former Senator Scott Brown, Morgan Stanley (MS) Managing Director and former Congressman Harold Ford, former Chairman of the House Financial Services Committee Barney Frank and Karl Rove, the former deputy chief of staff to President George W. Bush, participated, putting forward the importance of citizenship over partnership. Yet the panel certainly showcased differing views. At the very outset, Frank emphasized the importance of checks on rising inequality, causing Rove to sarcastically retort with a comparison of Jack Black and Robert Downey Jr.'s salaries.
In the end, all of the panelists agreed that more reaching across the aisle in Congress was necessary - and that when it comes to policies, you can't have your cake and eat it too.
This take-away led well into the next panel, "From Response to Resilience: Confronting Global Fiscal Policy Changes" where the panelists debated the heated tug-of-war on "growth vs. austerity."
Bethany McClean of Vanity Fair posed the question of the much-discussed errata published by Carmen Reinhart and Kenneth Rogoff, whose 2010 paper on public debt and growth became an infamous academic validation to support fiscal austerity.
While their data was indeed incorrect -- with The New York Times' Paul Krugman, for example, citing that the "economic case for austerity has collapsed," Julia Coronado, chief economist - North America at BNP Paribas said that much of this discussion has been overplayed. While she noted that she is not excusing faulty data, the basis of concern over high debt levels isn't entirely misplaced. "If you borrow excessively," she said, "you are borrowing from the future -- it is going to slow growth."
Importantly, though, Coronado added that "the only exception is if you are investing in something highly productive that creates new capacity." Of course, the borrowing we have seen--household borrowing (issue in the United States) and sovereign borrowing (issue in Europe) were not cases that were productive.
While the current environment, as dictated by Fed actions, favors savers over borrowers, there seem to be limited alternatives at this point. And of course, some economies can withstand austerity more than others--as a number of panelists have cited more flexibility from the populace in Japan, for example, than we had seen in Greece.
The bottom line: Particularly in the U.S., we need real consensus over budget priorities and growth priorities from the government. Ultimately, when we are spending and borrowing form the future it needs to be focused on productive categories in particular.
--Written by Nicole Urken in Las Vegas.