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Read the rules in the OP before posting, please.

In order to ensure that this thread continues to meet TL standards and follows the proper guidelines, we will be enforcing the rules in the OP more strictly. Be sure to give them a re-read to refresh your memory! The vast majority of you are contributing in a healthy way, keep it up!

NOTE: When providing a source, explain why you feel it is relevant and what purpose it adds to the discussion if it's not obvious.
Also take note that unsubstantiated tweets/posts meant only to rekindle old arguments can result in a mod action.
aksfjh
Profile Joined November 2010
United States4853 Posts
April 17 2013 00:39 GMT
#4001
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. Overall, the evidence we review contradicts Reinhart and Rogoff 's claim to have identified an important stylized fact, that public debt loads greater than 90 percent of GDP consistently reduce GDP growth.

Source
Another set of bad news for those hiding behind R-R for validity in the crusade against government debt.
JonnyBNoHo
Profile Joined July 2011
United States6277 Posts
April 17 2013 03:19 GMT
#4002
On April 17 2013 09:39 aksfjh wrote:
Show nested quote +
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. Overall, the evidence we review contradicts Reinhart and Rogoff 's claim to have identified an important stylized fact, that public debt loads greater than 90 percent of GDP consistently reduce GDP growth.

Source
Another set of bad news for those hiding behind R-R for validity in the crusade against government debt.

Doesn't count - they're just a bunch of liberal fruitcake commies :p

(I joke out of love)

I saw that study mentioned at Alphaville earlier today. Apparently RR gave a brief response. Here's the summary, you can see their full response at the link.

Here are their main points:

We were only arguing association, not causality.
Herndon, Ash et. al. (the critique's authors) still ostensibly got the same growth results for given levels of debt.
The authors argue that a 1% growth differential between countries of high and low debt levels is small. That is "utterly misleading."
They have published a separate paper, with Vincent Reinhart, that addresses some of the data the authors accuse Rogoff and Reinhart of leaving out.

The statement does not explicitly take on a charge in Herndon, Ash that they mis-entered some of their data into Excel.
Link
oneofthem
Profile Blog Joined November 2005
Cayman Islands24199 Posts
April 17 2013 03:41 GMT
#4003
well, statistical aggregations still have limits even given good data, when you have different types of situations that are not well distinguished, hence the lack of causality claim.

when you have a strong economy with a central government in control of its own money, that country would obviously sustain debt better than a small country subject to the whims of the bond market and export/import balance.
We have fed the heart on fantasies, the heart's grown brutal from the fare, more substance in our enmities than in our love
acker
Profile Joined September 2010
United States2958 Posts
Last Edited: 2013-04-17 07:32:16
April 17 2013 07:25 GMT
#4004
Well, they only ever argued for association in their book, not causality. And they did advocate for more expansionary fiscal and monetary policy.

Though Yglesias puts it best:


It's great that when challenged they retreat to the more defensible claim that their work is actually irrelevant, but many policymakers and pundits seem to feel otherwise.

It's going to have zero impact on politics.

The errors are still stupid, though.
NPF
Profile Joined May 2010
Canada1635 Posts
April 17 2013 09:25 GMT
#4005
The thing that bothers me the most is that Reinhart and Rogoff did this :


Unconventional Weighting. Reinhart-Rogoff divides country years into debt-to-GDP buckets. They then take the average real growth for each country within the buckets. So the growth rate of the 19 years that the U.K. is above 90 percent debt-to-GDP are averaged into one number. These country numbers are then averaged, equally by country, to calculate the average real GDP growth weight.

In case that didn't make sense, let's look at an example. The U.K. has 19 years (1946-1964) above 90 percent debt-to-GDP with an average 2.4 percent growth rate. New Zealand has one year in their sample above 90 percent debt-to-GDP with a growth rate of -7.6. These two numbers, 2.4 and -7.6 percent, are given equal weight in the final calculation, as they average the countries equally. Even though there are 19 times as many data points for the U.K.


source

I think this summer I'm going to read 1 or 2 stat books... it's something lacking from my science education.
DeepElemBlues
Profile Blog Joined January 2011
United States5079 Posts
Last Edited: 2013-04-17 10:14:24
April 17 2013 10:12 GMT
#4006
The Keynes defenders don't seem interested in the second half of Keynes - bringing deficits down and creating surpluses when the economy is good again. Deficits seem to matter very little either now or in the future to anyone but the Republicans. And even most Republicans just envision getting the deficit under control some time ten or fifteen years from now, and the deficits being smaller during that period under their plan as opposed to Obama's and future Democratic plans. I don't think that's very radical when it comes to cutting spending.

I just want to get, at least, deficits under $100 billion by 2025, and getting surpluses so we can actually pay down - not huge amounts, but just doing it - some of the principle on our debt. That would send a very powerful message to the rest of the world, economically and geopolitically, that the US is building a foundation of financial strength in its government as well as its economy. A US government in that fiscal position is just as important to the well-being of America as an economy that is operating without debt stockpiling up.
no place i'd rather be than the satellite of love
aksfjh
Profile Joined November 2010
United States4853 Posts
April 17 2013 10:16 GMT
#4007
On April 17 2013 19:12 DeepElemBlues wrote:
The Keynes defenders don't seem interested in the second half of Keynes - bringing deficits down and creating surpluses when the economy is good again. Deficits seem to matter very little either now or in the future to anyone but the Republicans. And even most Republicans just envision getting the deficit under control some time ten or fifteen years from now, and the deficits being smaller during that period under their plan as opposed to Obama's and future Democratic plans. I don't think that's very radical when it comes to cutting spending.

I just want to get, at least, deficits under $100 billion by 2025, and getting surpluses so we can actually pay down - not huge amounts, but just doing it - some of the principle on our debt. A US government in that fiscal position is just as important to the well-being of America as an economy that is operating at a low level of debt.

Um, how is the economy "good again"? We don't even have a time-table for recovery at this point, just handwaving from people that get hardons from the mention of austerity or "cutting spending."
DeepElemBlues
Profile Blog Joined January 2011
United States5079 Posts
Last Edited: 2013-04-17 10:32:58
April 17 2013 10:32 GMT
#4008
On April 17 2013 19:16 aksfjh wrote:
Show nested quote +
On April 17 2013 19:12 DeepElemBlues wrote:
The Keynes defenders don't seem interested in the second half of Keynes - bringing deficits down and creating surpluses when the economy is good again. Deficits seem to matter very little either now or in the future to anyone but the Republicans. And even most Republicans just envision getting the deficit under control some time ten or fifteen years from now, and the deficits being smaller during that period under their plan as opposed to Obama's and future Democratic plans. I don't think that's very radical when it comes to cutting spending.

I just want to get, at least, deficits under $100 billion by 2025, and getting surpluses so we can actually pay down - not huge amounts, but just doing it - some of the principle on our debt. A US government in that fiscal position is just as important to the well-being of America as an economy that is operating at a low level of debt.

Um, how is the economy "good again"? We don't even have a time-table for recovery at this point, just handwaving from people that get hardons from the mention of austerity or "cutting spending."


And freakouts by people who think that basically governments should be given blank checks to spend into prosperity, because if you can't spend a created from thin air extra 1 to 1.5 trillion a year that things will never get better.

Things are slowly and tentatively getting better overall, with many "three steps back moments," and certain regions of the country are doing far better than others and some regions have far better prospects for the future than others.

Germany has handed out how many billions of Euros now? Should Germany just tell Europe "write a number down and we'll suck it out of our country and hand it over to all of yours"?

Obama put down on paper almost a trillion dollars on stimulus his first year in office. Why was much of the money not spent until 2010? Why were many of the projects chosen simply bad investments? I'm not just talking about Solyndra there. The decision-making of where funds would go and the execution of that was badly flawed and quite incompetent. They essentially wasted a trillion dollars and the only real defense that was given was "it would have been worse if we hadn't." Great, I guess to be right we Republicans have to disprove a negative, and probably some other impossible things as well.

Why not encourage investment in inner cities, for example, by giving real tax breaks? Like, the way they used to do it in medieval times when a lord wanted to found a new town. Give them five years totally free from taxes, or almost all taxes they would ordinarily be subjected to. Spend taxpayer money on a serious effort to educate inner city kids simply how to work an entry-level job. A lot of them can't even do that. When you're basically unemployable, learning the skills to get and hold a job even at McDonald's or a stockboy at a grocery store or somewhere like that opens up a world of opportunities that would be impossible before. Do something different. We can't go on spending more money without broadening the tax base, unless you want to hit the middle class with some semi-serious tax raises.
no place i'd rather be than the satellite of love
aksfjh
Profile Joined November 2010
United States4853 Posts
April 17 2013 11:15 GMT
#4009
Here's a good breakdown of the spending and tax cuts part of the $819 billion stimulus package:
http://www.washingtonpost.com/wp-dyn/content/graphic/2009/02/01/GR2009020100154.html

Public vs private sector jobs:
http://money.usnews.com/money/careers/articles/2011/07/08/public-versus-private-sector-job-gains

It's not a blank check. It's a check to provide services that have been cut drastically in the past 3-4 years at the state and local level. Even then, the debt absorbed by the public sector can be eroded even faster by higher-than-expected inflation (3-4% instead of 1-2%), which has positive effects on employment as well.

As for the Euro and Germany, they don't have to do much except get out of the way of the ECB. The ECB should have been there for the troubled countries to stabilize their bond rates. Instead, they demanded governments to pull out the rug from under their own economies, which did nothing for the banks that were already in trouble.
McBengt
Profile Joined May 2011
Sweden1684 Posts
Last Edited: 2013-04-17 11:49:49
April 17 2013 11:49 GMT
#4010
ugh wrong thread, delete please.
"My twelve year old will out-reason Bill Maher when it comes to understanding, you know, what, uh, how to logic work" - Rick Santorum
BallinWitStalin
Profile Joined July 2008
1177 Posts
April 17 2013 12:21 GMT
#4011
On April 17 2013 19:12 DeepElemBlues wrote:
The Keynes defenders don't seem interested in the second half of Keynes - bringing deficits down and creating surpluses when the economy is good again. Deficits seem to matter very little either now or in the future to anyone but the Republicans. And even most Republicans just envision getting the deficit under control some time ten or fifteen years from now, and the deficits being smaller during that period under their plan as opposed to Obama's and future Democratic plans. I don't think that's very radical when it comes to cutting spending.

I just want to get, at least, deficits under $100 billion by 2025, and getting surpluses so we can actually pay down - not huge amounts, but just doing it - some of the principle on our debt. That would send a very powerful message to the rest of the world, economically and geopolitically, that the US is building a foundation of financial strength in its government as well as its economy. A US government in that fiscal position is just as important to the well-being of America as an economy that is operating without debt stockpiling up.


I am all for budget surpluses in boom years. There's definitely something to be said for living within your fiscal means and paying down debt. If individuals shouldn't take on debt they can't handle, governments shouldn't either.

Don't most "keynesians" argue that one of the main problems with this boom/bust cycle is that in the last boom, America was running massive deficits when surpluses were easily achievable?

I would also just like to point out that the party you percieve as "caring" about deficits had control of the government during that boom cycle, and eroded the surpluses in place created by the party that "doesn't care"...
I await the reminiscent nerd chills I will get when I hear a Korean broadcaster yell "WEEAAAAVVVVVUUUHHH" while watching Dota
BritishPizza
Profile Joined April 2013
United States10 Posts
April 17 2013 13:46 GMT
#4012
A stimulus package is not the answer. It will only create more debt and financial crisis. Look at what Japan's doing. They will soon end up bankrupt and in financial crisis.
JonnyBNoHo
Profile Joined July 2011
United States6277 Posts
April 17 2013 14:22 GMT
#4013
On April 17 2013 20:15 aksfjh wrote:
As for the Euro and Germany, they don't have to do much except get out of the way of the ECB. The ECB should have been there for the troubled countries to stabilize their bond rates. Instead, they demanded governments to pull out the rug from under their own economies, which did nothing for the banks that were already in trouble.

In many cases pulling the rug out was half the point. A weak economy (from austerity) would help the peripheral countries with their internal devaluation.
{CC}StealthBlue
Profile Blog Joined January 2003
United States41117 Posts
Last Edited: 2013-04-17 16:50:53
April 17 2013 16:47 GMT
#4014
You know the government is broken when it's elected leaders are to afraid to pass something the 10% decry whereas the 90% support. In this case background checks.
"Smokey, this is not 'Nam, this is bowling. There are rules."
HunterX11
Profile Joined March 2009
United States1048 Posts
April 17 2013 18:01 GMT
#4015
On April 17 2013 19:12 DeepElemBlues wrote:
The Keynes defenders don't seem interested in the second half of Keynes - bringing deficits down and creating surpluses when the economy is good again. Deficits seem to matter very little either now or in the future to anyone but the Republicans. And even most Republicans just envision getting the deficit under control some time ten or fifteen years from now, and the deficits being smaller during that period under their plan as opposed to Obama's and future Democratic plans. I don't think that's very radical when it comes to cutting spending.

I just want to get, at least, deficits under $100 billion by 2025, and getting surpluses so we can actually pay down - not huge amounts, but just doing it - some of the principle on our debt. That would send a very powerful message to the rest of the world, economically and geopolitically, that the US is building a foundation of financial strength in its government as well as its economy. A US government in that fiscal position is just as important to the well-being of America as an economy that is operating without debt stockpiling up.


I guess we just need another Republican president like Bill Clinton then
Try using both Irradiate and Defensive Matrix on an Overlord. It looks pretty neat.
aksfjh
Profile Joined November 2010
United States4853 Posts
April 17 2013 18:47 GMT
#4016
On April 17 2013 22:46 BritishPizza wrote:
A stimulus package is not the answer. It will only create more debt and financial crisis. Look at what Japan's doing. They will soon end up bankrupt and in financial crisis.

I'd be willing to bet against you on that.
Sermokala
Profile Blog Joined November 2010
United States13925 Posts
April 17 2013 20:38 GMT
#4017
On April 18 2013 01:47 {CC}StealthBlue wrote:
You know the government is broken when it's elected leaders are to afraid to pass something the 10% decry whereas the 90% support. In this case background checks.

You keep saying this like its going to change but its not. "backgound checks" being supported doesn't mean anything and you know it. Stop acting like everyone agrees on what "background checks" are.
A wise man will say that he knows nothing. We're gona party like its 2752 Hail Dark Brandon
Roe
Profile Blog Joined June 2010
Canada6002 Posts
April 17 2013 20:51 GMT
#4018
On April 18 2013 05:38 Sermokala wrote:
Show nested quote +
On April 18 2013 01:47 {CC}StealthBlue wrote:
You know the government is broken when it's elected leaders are to afraid to pass something the 10% decry whereas the 90% support. In this case background checks.

You keep saying this like its going to change but its not. "backgound checks" being supported doesn't mean anything and you know it. Stop acting like everyone agrees on what "background checks" are.


I thought it was pretty simple, check for:
History of criminal activity
History of mental health

in other words, make sure they haven't already engaged in criminal behaviour and that they aren't insane. I'm pretty sure this is how the majority of people see it.
farvacola
Profile Blog Joined January 2011
United States18826 Posts
April 17 2013 20:55 GMT
#4019
I would add residential history of criminal activity and mental health to that list, but yeah, it doesn't need to be all that complicated. Once the political process gets ahold of it, well, that's another story.
"when the Dead Kennedys found out they had skinhead fans, they literally wrote a song titled 'Nazi Punks Fuck Off'"
Sermokala
Profile Blog Joined November 2010
United States13925 Posts
April 17 2013 21:05 GMT
#4020
On April 18 2013 05:51 Roe wrote:
Show nested quote +
On April 18 2013 05:38 Sermokala wrote:
On April 18 2013 01:47 {CC}StealthBlue wrote:
You know the government is broken when it's elected leaders are to afraid to pass something the 10% decry whereas the 90% support. In this case background checks.

You keep saying this like its going to change but its not. "backgound checks" being supported doesn't mean anything and you know it. Stop acting like everyone agrees on what "background checks" are.


I thought it was pretty simple, check for:
History of criminal activity
History of mental health

in other words, make sure they haven't already engaged in criminal behaviour and that they aren't insane. I'm pretty sure this is how the majority of people see it.

but that says nothing about the background checks themselves. Will the government run the system or will the states? Will records be kept of these background checks? How are you going to facilitate people making private sales of guns? With background checks costing money are you going to charge people for them or will the government pick up the tab on that? Who decides who doesn't get guns and who gets guns? How are you going to punish people who "forget" to do a background check or "has a gun stolen but doesn't realize it"? How are you going to track different gun sales in a way that doesn't set up a national gun registry but still makes a way for the police to track back gang violence related guns back to its source?

All of this on top of the "this system won't do enough" liberals and "this system won't do anything" conservatives makes it so that background checks probably won't get anywhere and there really won't be anything new coming in gun control for another 10 years it seems.
A wise man will say that he knows nothing. We're gona party like its 2752 Hail Dark Brandon
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