Pete Peterson Linked Economists Caught in Austerity Error. A team of economists at the Political Economy Research Institute (PERI) at UMass Amherst broke a huge story this week that was promptly picked up by the New York Times, the Washington Post, the Financial Times, and newspapers around the globe.
The economists proved that the essential underpinning "of the intellectual edifice of austerity economics," as Paul Krugman put it, is based on sloppy methodology and spreadsheet coding errors. Reinhart-Rogoff Study Debunked Kenneth Rogoff and Carmen Reinhart Three years ago, Harvard economists Carmen Reinhart and Kenneth Rogoff released a study that presented empirical evidence from 44 nations over a 200 year time span to demonstrate that countries with a public debt over 90 percent of GDP (the United States is at about 100 percent, Japan at 200 percent) have average growth rates one percent lower than other nations. Forty-four countries, 200 years, Harvard -- pretty convincing, huh? PERI: : Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogo ff. Does High Public Debt Consistently Stifle Economic Growth?
A Critique of Reinhart and Rogo ff Abstract:Herndon, Ash and Pollin replicate Reinhart and Rogoff and find that coding errors, selective exclusion of available data, and unconventional weighting of summary statistics lead to serious errors that inaccurately represent the relationship between public debt and GDP growth among 20 advanced economies in the post-war period. They find that when properly calculated, the average real GDP growth rate for countries carrying a public-debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not -0:1 percent as published in Reinhart and Rogo ff. That is, contrary to RR, average GDP growth at public debt/GDP ratios over 90 percent is not dramatically different than when debt/GDP ratios are lower.
The authors also show how the relationship between public debt and GDP growth varies significantly by time period and country. U.S. faces 2013 recession after ‘fiscal cliff’: CBO. By Agence France-PresseTuesday, May 22, 2012 19:19 EDT WASHINGTON — The United States faces a likely recession next year if Congress fails to stop scheduled spending cuts and tax hikes in January, congressional budget analysts warned Tuesday.
The nonpartisan Congressional Budget Office said that if currently mandated fiscal conditions are implemented — what some observers call a “fiscal cliff” — the economy would contract at an annual rate of 1.3 percent in the first half of 2013. That downturn “would probably be judged to be a recession,” the agency said in a report. The CBO predicted the economy would rebound in the second half of the year, to an annual pace of 2.3 percent, leaving full-year gross domestic product growth of just 0.5 percent. Could this time have been different? (KEVIN LAMARQUE - REUTERS) Christina Romer had traveled to Chicago to perform an unpleasant task: she needed to scare her new boss.
David Axelrod, Barack Obama’s top political adviser, had been very clear about that. Who bankrolls the Super Congress? The Super Congress has its work cut out: Twelve lawmakers have been tapped to identify more than $1 trillion in spending cuts in an autumn marathon never before seen in Washington.
Democratic Sen. Patty Murray of Washington and Republican Rep. Jeb Hensarling of Texas will co-chair the committee, with a backup chorus of lawmakers representing the full political spectrum. Every member of the Super Congress comes with a history of political patrons and connections with special interests. Text of S&P downgrade of U.S. rating. WASHINGTON (MarketWatch) — The following is the text of Standard & Poor’s downgrade of the United States:See related story.
“TORONTO (Standard & Poor’s) Aug. 5, 2011–Standard & Poor’s Ratings Services said today that it lowered its long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’. Standard & Poor’s also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor’s affirmed its ‘A-1+’ short-term rating on the U.S. In addition, Standard & Poor’s removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications. National Commission on Fiscal Responsibility and Reform. A Victory, and a Knife in the Side By MICHAEL POWELL Funding for Mayor Bill de Blasio’s prekindergarten initiative came with a lesson in the politics of Albany and Gov.
Andrew M. Cuomo. April 3, 2014, Thursday. Alan Simpson: Cutting Social Security Benefits to “Take Care of the Lesser People in Society” Each time the Catfood Commission holds its secret meetings, Alex Lawson of Social Security Works has been outside with his camera, shooting video of the closed front door as FDL runs a live stream on our front page.
The Washington Post wrote it up recently. The US debt: Who we owe (and who got us here in the first place) in a simple chart. Adding to the deficit: Bush vs. Obama. Culture Connoisseur Badge Culture Connoisseurs consistently offer thought-provoking, timely comments on the arts, lifestyle and entertainment.
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