Fiscal crowding out
In the episode featuring Ivan Eland, Bob Zadek gives the term what he calls its specific meaning in this context: if the government borrows money, then money that otherwise would be lent to or invested by businesses to grow the economy either is not available or becomes more expensive, because the government is such a massive borrower. He asks how significant the effect is and whether it should be part of the conversation The Return of Big Spending Republicans? (2017).
Eland agrees that it is significant. He notes that a $20 trillion figure refers only to public debt and does not include private debt, and that the bigger the public debt, the smaller the private debt. Businessmen need to borrow to expand, so crowding out occurs because there is only so much money; it also makes borrowing more expensive for private businesses by raising interest rates above where they would otherwise be. He observes that interest rates had recently been low, but that as they rise there will be more crowding out, and that interest on the debt could become one of the higher categories of the budget, if not the highest, given the interest payments. He adds that it is best to live within your means The Return of Big Spending Republicans? (2017).
Zadek extends the point: crowding out not only deprives business of debt and investment capital, but a dollar spent by government has a much less positive effect on the economy than the same dollar spent by private business. He describes a profound drain on growth from government acting as an aggressive competitor for available debt dollars, and says some of the energy is sucked out of the economy by massive government borrowing. Eland answers that public works programs such as the infrastructure then under discussion raise the question of who does the work, and that the average person, asked whether government or a private business would be more efficient, says the private business. He identifies an opportunity cost when tax dollars go to government rather than being spent in the private sector, and says the private sector can provide jobs more efficiently. His explanation for government’s lesser efficiency is that government spends other people’s money while the private sector spends its own The Return of Big Spending Republicans? (2017).
Crowding out and the unseen
In the episode with Alex Nowrasteh, Zadek invokes Frédéric Bastiat, described as an economic philosopher of the middle of the 19th century, who observed that small benefits are seen and visible while profound detriments are dispersed and invisible. Zadek illustrates with produce that is slightly more expensive at the supermarket: no shopper attributes the higher price to immigration policy, so the effect is invisible, while the small segment of the population that gets a raise or a job feels it and credits the policy. He says the overwhelming majority pays through higher taxes and higher costs of goods without knowing the cause Alex Nowrasteh: How Prop. 187 Turned California Blue (2016).
Nowrasteh agrees and adds another unseen effect: businesses see their customer bases deported, cannot hire Americans or buy the capital goods that stock their businesses, and cannot sell what they produce, so they let other workers go. He says there is no path to prosperity by decreasing the supply of people in the country, because it diminishes both the supply and demand sides of the economy and makes almost all of us a little poorer, and in the long run all of us poorer Alex Nowrasteh: How Prop. 187 Turned California Blue (2016).
Zadek then frames the political problem in the language of displacement: the economic history of the country shows, without exception, that economic life accelerates during periods of liberal immigration policy and is flatlined or worse during periods of constricted immigration policy, and he says the evidence is overwhelming and that emotional feelings are crowding out all of the data, so that the debate is largely data-less. Nowrasteh replies that the issues most emotional are those where foreigners are involved — foreign policy, trade policy, immigration — and that humans find it difficult to comprehend that having more people from other places increases the size of the economy and the standard of living and allows more opportunities for trade and business. He notes that this has been argued since Adam Smith wrote The Wealth of Nations in 1776, with only a little headway since Alex Nowrasteh: How Prop. 187 Turned California Blue (2016).
Earlier in the same conversation, Nowrasteh had put numbers on the deportation scenario: deporting all illegal immigrants would, without counting government costs, shrink the US economy by about 5% initially and make growth more difficult afterward; decreasing the supply of high-skilled workers would reduce growth in high-skilled industries; and the stated goal of 4% annual growth would be virtually impossible without a rapidly growing population of workers and consumers. He identifies the guaranteed beneficiaries of such a program as the government employees who carry out the orders and the government unions representing them, with private prison corporations and other government contractors as possible beneficiaries. A speculative group is Americans 25 or older with less than a high school degree, some of whom might see nominal wage increases of about 3% to 8%, though prices for what they buy would rise; that population is 8% to 9% of the whole, while every other group of workers would lose, and those losers are about 91% to 92% Alex Nowrasteh: How Prop. 187 Turned California Blue (2016).
Crowding out in education
In the episode with Jonathan Butcher, Zadek asks whether the teaching of Critical Race Theory as it works its way into the K–12 curriculum is crowding out basic education and STEM education, or supplementing it, or running parallel to it, and what the effect is on core education in reading, science, math and civics Splintered: Critical Race Theory and the Progressive War on Truth (2022).
Butcher answers that Critical Race Theory is not its own subject in K–12 schools but a worldview meant to be applied, and that it has been applied to any subject. He cites a California curriculum developed by school district officials from around the state and funded through the Gates Foundation that says math is a tool of white supremacy, that math should be used to dismantle white supremacy, and that math is a tool of capitalism to be criticized if not disrupted. He names Gloria Ladson-Billings, a Critical Race theorist and professor at a Teachers College in Wisconsin, as the keynote speaker for the National Council of the Teachers of Mathematics in 2019. He also describes a science teachers association hiring a Critical Race theorist to speak about critical affinity spaces in science teaching, Arizona State University hiring a professor to teach music through the Critical Race Theory lens, and literature teachers using the hashtag DisruptTexts to remove classic works — from Shakespeare to the Odyssey and the Iliad to To Kill a Mockingbird — in favor of more recent “anti-racist” books. He concludes that it is crowding out, calling it a virus, or perhaps better a cancer that crowds out the healthy cells of education, and says the product of that educational system is a disability from not having learned objective quality education, crowded out by the teaching of Critical Race Theory Splintered: Critical Race Theory and the Progressive War on Truth (2022).
Across episodes
The excerpts show the term used in two registers rather than a single developing argument. The fiscal sense is set out by Zadek and elaborated by Ivan Eland in the episode on big-spending Republicans, where crowding out is a mechanism of debt markets and interest rates. The metaphorical sense appears in the immigration episode, where Zadek speaks of emotional feelings crowding out data and Nowrasteh supplies the underlying economic estimates, and in the education episode, where Zadek’s question and Butcher’s answer apply crowding out to curriculum. No excerpt shows a later guest revising an earlier guest’s treatment of the fiscal mechanism.
What the sources do not cover
The excerpts do not give a formal definition of crowding out beyond Zadek’s own framing, nor do they supply empirical estimates of the fiscal effect’s magnitude. The education discussion rests on a single guest’s account of particular curricula, associations and individuals. The immigration discussion’s figures are attributed to Nowrasteh and are not independently corroborated in the excerpts.