Debunked Economists Face Even More Embarassment

Reinhart And Rogoff's Pro-Austerity Research Now Even More Thoroughly Debunked By Studies

The debunking of Carmen Reinhart and Kenneth Rogoff continues. The Harvard economists have argued that mistakes and omissions in their influential research on debt and economic growth don't change their ultimate austerity-justifying conclusion: That too much debt hurts growth.

But even this claim has now been disproved by two new studies, which suggest the opposite might in fact be true: Slow growth leads to higher debt, not the other way around.

In a post at Quartz, University of Michigan economics professor Miles Kimball and University of Michigan undergraduate student Yichuan Wang write that they have crunched Reinhart and Rogoff's data and found "not even a shred of evidence" that high debt levels lead to slower economic growth.

And a new paper by University of Massachusetts professor Arindrajit Dube finds evidence that Reinhart and Rogoff had the relationship between growth and debt backwards : Slow growth appears to cause higher debt, if anything.

http://qz.com/88781/after-crunching-rei ... =dbamerica

I'm loving this... Everything Paul Ryan, The Club for Growth, The Heritage Foundation, Grover Norquist, all of the rest of the "Austerity Now", [screech]High Debt=Bad, Austerity/Poverty=Good"[/screech] crowd have been squawking about is WRONG... The initial finding that they didn't even get their MATH right, and don't know how to use an Excel spreadsheet, is now down the tubes even more.

The trickle-down Randroid economics is a dog that won't hunt...He11, it can't even get up and walk... And the more the sequester bites into their constituent's lives **, the more the GoTP is going to pay the price...

Jus' keep doin' what yer doin'.... :thumbsup: :rofllol


** This is the clown that just a month ago said "his constituents not only 'approved' of the sequester, but thought it should be more, not less." Apparently his constituents called "bull-pucky", and now he's getting the message that A) he was lying, and "sequestration is not the way to go."

So, KEEP IT UP!!! PLEASE!!!!

You couldn't even pass the "Over last 6 years - which company paid most taxes" test and you want us to believe you understand this? :rofllol :rofllol :rofllol

Harvard economists versus a Michigan Prof and his undergrad? Who would you believe? Plus LJ doesn't understand that spending all of your tax receipts servicing debt leaves less money for actual spending. If you are spending 50% of your household income paying the minimum on your credit card bills your household budget is reduced.

Still trying to run that [screech]High Debt=Bad, Austerity/Poverty=Good"[/screech] routine...

Oh, well... Have fun with it... The American people are figuring out that it's okay to "pay no attention to that lunatic behind the curtain."

And Fred still doesn't know how to read the report: that allowing debt TO INCREASE, and INCREASE EMPLOYMENT, TO INCREASE SPENDING IN THE ECONOMY CREATES MORE JOBS AND THEREFORE MORE IN TAX REVENUE TO SERVICE THE DEBT than "austerity does." :Snooze

LadyJazzer wrote: Still trying to run that [screech]High Debt=Bad, Austerity/Poverty=Good"[/screech] routine...

Oh, well... Have fun with it... The American people are figuring out that it's okay to "pay no attention to that lunatic behind the curtain."

"lunatic behind the curtain?" This isn't the Eric Holder thread?

LadyJazzer wrote: Still trying to run that [screech]High Debt=Bad, Austerity/Poverty=Good"[/screech] routine...

Oh, well... Have fun with it... The American people are figuring out that it's okay to "pay no attention to that lunatic behind the curtain."

And Fred still doesn't know how to read the report: that allowing debt TO INCREASE, and INCREASE EMPLOYMENT, TO INCREASE SPENDING IN THE ECONOMY CREATES MORE JOBS AND THEREFORE MORE IN TAX REVENUE TO SERVICE THE DEBT than "austerity does." :Snooze

I suppose to boost your own household income you put 100K on credit cards every month right? #economicilliteracy :rofllol

No... To increase your household income you buy your house with a mortgage.... An effective use of debt. How many of you republicans who are homeowners didnt buy your homes using a mortgage? What would it do to your lifestyle if you had to pay off your mortgage in a few years. And why would you do that anyway? Most people never pay off a mortgage... Until perhaps they retire and downsize.... Debt is not always a bad thing.

Debt isn't a bad thing IF you use it correctly and have a realistic means of paying it down, or off. That's a big if in this country right now.

archer wrote: No... To increase your household income you buy your house with a mortgage.... An effective use of debt. How many of you republicans who are homeowners didnt buy your homes using a mortgage? What would it do to your lifestyle if you had to pay off your mortgage in a few years. And why would you do that anyway? Most people never pay off a mortgage... Until perhaps they retire and downsize.... Debt is not always a bad thing.

I didn't say debt was a bad thing, but level of debt must be considered. Finance professionals say you should only buy a house that would take you about three years with combined income to pay off. Right now US debt load is moving to twice of yearly GDP, not yearly tax recipts, but yearly GDP. Actually much higher than many of the basket case countries in Europe. And while I admit slowing spending will hurt, it is better to do now before debt rises to 3 times yearly GDP. Why sequestration is a good start.

FredHayek wrote: Finance professionals say you should only buy a house that would take you about three years with combined income to pay off.

Really?... And your source for that would be ______________?

I guess that's why virtually every mortgage since at least 1934 is a 30-year mortgage?