Does the size of the national debt really matter?

[idb]

I try to keep current

too stupid!! If so then try to tell us how a liberal stimulus helps the economy rather than hurts it or admit as a liberal you lack the IQ to do so.

Leaving aside all the theory and the questions about the IQ of libtards, why is the growth rate of the US so much higher than the European Union nations.
Isn't austerity the generally adopted policy in the European Union?

 

[editec]

Fascinating.

I am of the opinion that the debt means something real ONLY to the extend that our MONEY means something real.

And given that SOME OF US are granted the power to invent money in various ways, money that basically has NO RIGHT TO EXIST IN THE FIRST PLACE, I am of the opinion that the debt crises is entirely an artifical construct designed to keep those with power, in power.

There is no greater power in a money-driven economic system than the power to invent money at will.

And given that SOME OF US are granted the power to invent money in various ways

Did you ever buy a house with a mortgage? Take out a car loan?
If so, you invented money. I won't tell if you don't.

No I did not have the right to invent that new money.

The bank did...AT INTEREST.

Now understand, if the system was modified every so slightly, then I believe that this nation needs a national bank AND private banks, too (still having fractal prevleges).

But what we have now is a mockery of capitalism, mate

 

[Two Thumbs]

I try to keep current

too stupid!! If so then try to tell us how a liberal stimulus helps the economy rather than hurts it or admit as a liberal you lack the IQ to do so.

Leaving aside all the theory and the questions about the IQ of libtards, why is the growth rate of the US so much higher than the European Union nations.
Isn't austerity the generally adopted policy in the European Union?

no

They spent themselves to the edge of oblivion and now must use drastic measures.

the dnc leadership clearly is trying to do the same thing, so they can say austerity can't be done b/c look at what happened to the EU, so they can keep spending and make more and more people dependent on the government

 

[oldfart]

I just got negged by Poster "007". It turns out he has blocked any replies. Is this kind of cowardice common on this board?

 

[oldfart]

Just admit that you do not keep up with the economics literature and we'll let it rest at that.

Actually just about everything R--R wrote has been discredited,

Actually, everything RR have written have most definitely NOT been discredited. If you've read their work on what happens after an asset bubble collapses - which most of these bozo economists and their general equilibrium models were blithely unaware was about to happen - they've pretty much nailed the course of the US economy post 2007.

Actually I haven't read anything by Reinhart or Rogoff (except for one paper by Rogoff) prior to the 2010 paper.

Outstanding.

Glad you like it.

 

[Toro]

I just got negged by Poster "007". It turns out he has blocked any replies. Is this kind of cowardice common on this board?

This is not uncommon.

 

[tjvh]

It is commonly thought that the huge debt is a drag on the economy, Paul Ryan and the GOP have adopted this putative as a basis to attack Obama, toss Bush II under the bus and impede efforts to create jobs, stimulate the economy and repair, replace and renovate our aging infrastructure.

What if Ryan and the GOP are wrong?

See:

How a student took on eminent economists on debt issue - and won

No, the size of the National debt doesn't matter... Democrats may feel free to continue spending like drunken sailors until we run out of ink to print money.

 

[oldfart]

too stupid!! If so then try to tell us how a liberal stimulus helps the economy rather than hurts it or admit as a liberal you lack the IQ to do so.

Ed, if you really don't have anything to say, crawl back under your rock.

Gee, Krugman has plenty to say about it; I wonder why you are so afraid to talk about it?? What does that tell us about the liberals character and IQ? It's so much easier to stick to trivia isn't it?

Actually I tried at the start to have a detailed discussion of the R--R paper, but everyone seemed more interested in making political points. If anyone wants to discuss the paper, I'm game.

So assuming you or anyone else out there is serious, this is my start.

The Reinhart & Rogoff 2010 paper became the darling of the right wing because it implied (subsequently R--R went to great lengths to state they never explicitly made the argument that high debt-to-GDP ratios caused slower growth) that there was a "threshold at about 90% beyond which growth dramatically slowed and in many cases became negative. This was the "other shoe" after the Alesina and Ardagna paper on "expansionary austerity" which turned out to be such an intellectual catastrophe.

In short, the R--R paper looked at published data from 1946 through 2009 for a number of advanced economies and a number of emerging economies. Although they relied on widely available published public sources for their data (public debt and GDP), they were unusually secretive about their actual data set, which no one could duplicate and get results anywhere close to theirs. As early as Sunday, July 4, 2010 Dean Baker was complaining, "Mr Rogoff and Ms. Reinhart have declined to adhere to standard ethics within the economics profession and have refused to share the data on which they base their conclusion with other researchers."

This and the divergence of their results from what other researchers had found led to a high level of interest in their actual data set and methodology. Their main finding was that there was a high negative correlation between high debt-to-GDP ratios and slowing economic growth and that there was an inflection point around 90% where this effect accelerated. The total decrease in growth "averaged" about 1% slower growth, which is actually quite a bit.

Slowly information leaked out and began to circulate. Curiously R--R blamed the post WWII slowdown on "debt overhang" when the obvious cause was demobilization. So attributing 1946--1948 slowdowns in Britain, Europe, and the US to public debt seems quite a stretch at a time of extremely high savings, pent-up consumer demand, and the need for massive reconstruction in Europe.

On April 16, 2013, Mike Konczal published a petty good summary of the data problems with R--R. He notes,

In a new paper, "Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff," Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst successfully replicate the results. After trying to replicate the Reinhart-Rogoff results and failing, they reached out to Reinhart and Rogoff and they were willing to share their data spreadhseet. This allowed Herndon et al. to see how how Reinhart and Rogoff's data was constructed.

They find that three main issues stand out. First, Reinhart and Rogoff selectively exclude years of high debt and average growth. Second, they use a debatable method to weight the countries. Third, there also appears to be a coding error that excludes high-debt and average-growth countries. All three bias in favor of their result, and without them you don't get their controversial result.

So let's look at the three issues a little closer.

Selective Exclusions. Reinhart-Rogoff use 1946-2009 as their period, with the main difference among countries being their starting year. In their data set, there are 110 years of data available for countries that have a debt/GDP over 90 percent, but they only use 96 of those years. The paper didn't disclose which years they excluded or why.

Herndon-Ash-Pollin find that they exclude Australia (1946-1950), New Zealand (1946-1949), and Canada (1946-1950). This has consequences, as these countries have high-debt and solid growth. Canada had debt-to-GDP over 90 percent during this period and 3 percent growth. New Zealand had a debt/GDP over 90 percent from 1946-1951. If you use the average growth rate across all those years it is 2.58 percent. If you only use the last year, as Reinhart-Rogoff does, it has a growth rate of -7.6 percent. That's a big difference, especially considering how they weigh the countries.

OK, it turns out that selectively excluding these three countries reduces the lower growth rate from 1.0% to 0.7%, quite a substantial amount. And remember that R--R offer no rationale for excluding these data points. Is it just to make their numbers look better? It's especially egregious that these post-WWII years are omitted by the same authors who claimed that "debt overhang" was causing low growth in the same period. That's easy to prove when you can simply discard all data that disagrees with you!

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.

This is truly bizarre. I know of no statistical convention that would justify this and it flies in the face of all sampling theory. Neither have I seen anyone use this kind of method before. Typically, if you were to average this kind of data, you would at least weight each country by size of GDP so larger economies count more than small ones. But here Iceland gets the same weighting as the United States.

Now maybe you don't want to give equal weighting to years (technical aside: Herndon-Ash-Pollin bring up serial correlation as a possibility). Perhaps you want to take episodes. But this weighting significantly reduces the average; if you weight by the number of years you find a higher growth rate above 90 percent. Reinhart-Rogoff don't discuss this methodology, either the fact that they are weighing this way or the justification for it, in their paper.

Ignoring serial correlation in time series data is a profound no-no. Using bizarre methodology is one thing, but not telling anyone what you are doing is tantamount to an admission of intentional doctoring of the results. To call it intellectual dishonesty is an understatement. Of course coming from Harvard, no one expected any ethical concerns to begin with.

And finally the "coding error".

As Herndon-Ash-Pollin puts it: "A coding error in the RR working spreadsheet entirely excludes five countries, Australia, Austria, Belgium, Canada, and Denmark, from the analysis. [Reinhart-Rogoff] averaged cells in lines 30 to 44 instead of lines 30 to 49...This spreadsheet error...is responsible for a -0.3 percentage-point error in RR's published average real GDP growth in the highest public debt/GDP category." Belgium, in particular, has 26 years with debt-to-GDP above 90 percent, with an average growth rate of 2.6 percent (though this is only counted as one total point due to the weighting above).

The error speaks for itself. Strange that it had such a pronounced bias toward R--R's results!

You can see the spreadsheet error here for yourself:
Researchers Finally Replicated Reinhart-Rogoff, and There Are Serious Problems. | Next New Deal

The OECD also has a paper on the controversy at Public Debt, Economic Growth and Nonlinear Effects - Papers - OECD iLibrary

Further, Arindrajit Dube has a study out Guest Post: Reinhart/Rogoff and Growth in a Time Before Debt | Next New Deal showing preliminary results which are pretty convincing that low growth is the cause, not the effect, of high debt-to-GDP ratios. Note that R--R now retreat to the claim that they never asserted causality; but it certainly was implied. They never made any sort of disclaimer when everyone on the right was lionizing them for providing the intellectual foundation for the debt panic.

So where does this leave us? First, I don't think any sane economist is going to trust Reinhart and Rogoff again, no matter how well received their earlier work was. It's hard to overcome being a liar and a cheat in academic circles, regardless of how popular you are on Fox News. Maybe even the Von Mises Institute will put them on the "persona non grata" list.

Second, the intellectual debate is over. R--R is as discredited as A--A was in the same time frame. We have been basing austerian policy on a pack of lies and suffered for it. Public and professional ridicule is the least that should be heaped on the perpetrators and their defenders. Maybe next time someone will be a little slower to drink the koolaid.

So if anyone out there wants to make a reasoned argument for this ideology masquerading as research, bring it on.

And I don't really expect anyone to. It's much more fun when you are as ethically corrupt as your ideology to ignore the evidence and arguments and just throw around political bullshit.

Jamie

 

[EdwardBaiamonte]

Isn't austerity the generally adopted policy in the European Union?

NO NO NO!!!!!The evidence is to the contrary. The European Union economies that have experienced the highest growth in the past three years—Germany, Latvia, Lithuania, Poland and Sweden—all take austerity seriously. The European Commission's Winter 2013 forecast shows a similar trend. The five fastest-growing economies in Europe are projected to be Bulgaria, Estonia, Latvia, Lithuania and Romania—all fiscal hawks.

 

[idb]

Ed, if you really don't have anything to say, crawl back under your rock.

Gee, Krugman has plenty to say about it; I wonder why you are so afraid to talk about it?? What does that tell us about the liberals character and IQ? It's so much easier to stick to trivia isn't it?

Actually I tried at the start to have a detailed discussion of the R--R paper, but everyone seemed more interested in making political points. If anyone wants to discuss the paper, I'm game.

So assuming you or anyone else out there is serious, this is my start.

The Reinhart & Rogoff 2010 paper became the darling of the right wing because it implied (subsequently R--R went to great lengths to state they never explicitly made the argument that high debt-to-GDP ratios caused slower growth) that there was a "threshold at about 90% beyond which growth dramatically slowed and in many cases became negative. This was the "other shoe" after the Alesina and Ardagna paper on "expansionary austerity" which turned out to be such an intellectual catastrophe.

In short, the R--R paper looked at published data from 1946 through 2009 for a number of advanced economies and a number of emerging economies. Although they relied on widely available published public sources for their data (public debt and GDP), they were unusually secretive about their actual data set, which no one could duplicate and get results anywhere close to theirs. As early as Sunday, July 4, 2010 Dean Baker was complaining, "Mr Rogoff and Ms. Reinhart have declined to adhere to standard ethics within the economics profession and have refused to share the data on which they base their conclusion with other researchers."

This and the divergence of their results from what other researchers had found led to a high level of interest in their actual data set and methodology. Their main finding was that there was a high negative correlation between high debt-to-GDP ratios and slowing economic growth and that there was an inflection point around 90% where this effect accelerated. The total decrease in growth "averaged" about 1% slower growth, which is actually quite a bit.

Slowly information leaked out and began to circulate. Curiously R--R blamed the post WWII slowdown on "debt overhang" when the obvious cause was demobilization. So attributing 1946--1948 slowdowns in Britain, Europe, and the US to public debt seems quite a stretch at a time of extremely high savings, pent-up consumer demand, and the need for massive reconstruction in Europe.

On April 16, 2013, Mike Konczal published a petty good summary of the data problems with R--R. He notes,


So let's look at the three issues a little closer.


OK, it turns out that selectively excluding these three countries reduces the lower growth rate from 1.0% to 0.7%, quite a substantial amount. And remember that R--R offer no rationale for excluding these data points. Is it just to make their numbers look better? It's especially egregious that these post-WWII years are omitted by the same authors who claimed that "debt overhang" was causing low growth in the same period. That's easy to prove when you can simply discard all data that disagrees with you!



This is truly bizarre. I know of no statistical convention that would justify this and it flies in the face of all sampling theory. Neither have I seen anyone use this kind of method before. Typically, if you were to average this kind of data, you would at least weight each country by size of GDP so larger economies count more than small ones. But here Iceland gets the same weighting as the United States.

Now maybe you don't want to give equal weighting to years (technical aside: Herndon-Ash-Pollin bring up serial correlation as a possibility). Perhaps you want to take episodes. But this weighting significantly reduces the average; if you weight by the number of years you find a higher growth rate above 90 percent. Reinhart-Rogoff don't discuss this methodology, either the fact that they are weighing this way or the justification for it, in their paper.

Ignoring serial correlation in time series data is a profound no-no. Using bizarre methodology is one thing, but not telling anyone what you are doing is tantamount to an admission of intentional doctoring of the results. To call it intellectual dishonesty is an understatement. Of course coming from Harvard, no one expected any ethical concerns to begin with.

And finally the "coding error".

As Herndon-Ash-Pollin puts it: "A coding error in the RR working spreadsheet entirely excludes five countries, Australia, Austria, Belgium, Canada, and Denmark, from the analysis. [Reinhart-Rogoff] averaged cells in lines 30 to 44 instead of lines 30 to 49...This spreadsheet error...is responsible for a -0.3 percentage-point error in RR's published average real GDP growth in the highest public debt/GDP category." Belgium, in particular, has 26 years with debt-to-GDP above 90 percent, with an average growth rate of 2.6 percent (though this is only counted as one total point due to the weighting above).

The error speaks for itself. Strange that it had such a pronounced bias toward R--R's results!

You can see the spreadsheet error here for yourself:
Researchers Finally Replicated Reinhart-Rogoff, and There Are Serious Problems. | Next New Deal

The OECD also has a paper on the controversy at Public Debt, Economic Growth and Nonlinear Effects - Papers - OECD iLibrary

Further, Arindrajit Dube has a study out Guest Post: Reinhart/Rogoff and Growth in a Time Before Debt | Next New Deal showing preliminary results which are pretty convincing that low growth is the cause, not the effect, of high debt-to-GDP ratios. Note that R--R now retreat to the claim that they never asserted causality; but it certainly was implied. They never made any sort of disclaimer when everyone on the right was lionizing them for providing the intellectual foundation for the debt panic.

So where does this leave us? First, I don't think any sane economist is going to trust Reinhart and Rogoff again, no matter how well received their earlier work was. It's hard to overcome being a liar and a cheat in academic circles, regardless of how popular you are on Fox News. Maybe even the Von Mises Institute will put them on the "persona non grata" list.

Second, the intellectual debate is over. R--R is as discredited as A--A was in the same time frame. We have been basing austerian policy on a pack of lies and suffered for it. Public and professional ridicule is the least that should be heaped on the perpetrators and their defenders. Maybe next time someone will be a little slower to drink the koolaid.

So if anyone out there wants to make a reasoned argument for this ideology masquerading as research, bring it on.

And I don't really expect anyone to. It's much more fun when you are as ethically corrupt as your ideology to ignore the evidence and arguments and just throw around political bullshit.

Jamie

Cheers for all that, very interesting.

A couple of questions;
Why would you weight a larger GDP greater than a small one for this sort of exercise?
Isn't the study intended to assess how economies react to debt - I would have thought that the size of the economy would make no difference?

Also, do you have some links or information demonstrating the influence that they had on the reaction of economists and governments to the recession?
I understand, for one thing, they gave a presentation to 40 senators not long after they published their report.

 

[EdwardBaiamonte]

So if anyone out there wants to make a reasoned argument for this ideology masquerading as research, bring it on.

as I said, the corrected data shows growth to be double when debt is low. Rogoff says the corrected data does not change the conclusion of his research although it does somewhat reduce the value of low debt.

In any case, the research supports common sense in that the more bureaucrats spend or waste the less an economy can grow. Moreover, the research is probably not that important anyway in the it measure only one variable: debt/GDP. It is obvious that a country could have no debt and no growth given enough other liberal anti growth policies.

 

[idb]

So if anyone out there wants to make a reasoned argument for this ideology masquerading as research, bring it on.

as I said, the corrected data shows growth to be double when debt is low. Rogoff says the corrected data does not change the conclusion of his research although it does somewhat reduce the value of low debt.

In any case, the research supports common sense in that the more bureaucrats spend or waste the less an economy can grow. Moreover, the research is probably not that important anyway in the it measure only one variable: debt/GDP. It is obvious that a country could have no debt and no growth given enough other liberal anti growth policies.

If you stopped your pathetic political jibes with every post you might actually get the discussion you appear to be after.

the research supports common sense in that the more bureaucrats spend or waste the less an economy can grow

Wouldn't it be more important where the government spending is going rather than the amount?

 

[EdwardBaiamonte]

Wouldn't it be more important where the government spending is going rather than the amount?

well, playing venture capitalist with our money and investing in Solyndras and many many others is certainly stupid regardless of the amount.

In a steep recession they should spend as little as conceivably possible, so business can spend more, and what they must spent should be on military since that at least protects us and may produce spin off benefits.

 

[Toddsterpatriot]

Fascinating.

I am of the opinion that the debt means something real ONLY to the extend that our MONEY means something real.

And given that SOME OF US are granted the power to invent money in various ways, money that basically has NO RIGHT TO EXIST IN THE FIRST PLACE, I am of the opinion that the debt crises is entirely an artifical construct designed to keep those with power, in power.

There is no greater power in a money-driven economic system than the power to invent money at will.

And given that SOME OF US are granted the power to invent money in various ways

Did you ever buy a house with a mortgage? Take out a car loan?
If so, you invented money. I won't tell if you don't.

No I did not have the right to invent that new money.

The bank did...AT INTEREST.

Now understand, if the system was modified every so slightly, then I believe that this nation needs a national bank AND private banks, too (still having fractal prevleges).

But what we have now is a mockery of capitalism, mate

If you didn't take out the loan, no new money would have been "invented".
I blame you.

Now understand, if the system was modified every so slightly

What do you have in mind?

 

[idb]

Wouldn't it be more important where the government spending is going rather than the amount?

well, playing venture capitalist with our money and investing in Solyndras and many many others is certainly stupid regardless of the amount.

In a steep recession they should spend as little as conceivably possible, so business can spend more, and what they must spent should be on military since that at least protects us and may produce spin off benefits.

So you're saying that government spending can produce benefits?
Why only the military though?
Why not fund the military for it's core functions only and spend money encouraging private businesses by commissioning infrastructure projects or investing in R&D?

 

[KevinWestern]

It is commonly thought that the huge debt is a drag on the economy, Paul Ryan and the GOP have adopted this putative as a basis to attack Obama, toss Bush II under the bus and impede efforts to create jobs, stimulate the economy and repair, replace and renovate our aging infrastructure.

What if Ryan and the GOP are wrong?

See:

How a student took on eminent economists on debt issue - and won

Is it ethical for the US to spend more than it can feasibly pay back in the future?

When the debt grows so big that there's no conceivable way of paying back our lenders, who exactly loses out?



.

 

[EdwardBaiamonte]

So you're saying that government spending can produce benefits?

yes

Why only the military though?

dear, the military saved us from the Nazis!! How can you top that??????

Why not fund the military for it's core functions only

dear, its core function is to be able to win a war against a 2-3 nation attack.

and spend money encouraging private businesses by commissioning infrastructure projects or investing in R&D?

what?? infrastructure does not directly save us from the Nazis, and does not cause the invention of new products. New products got us from the stone age to here!

R&D???? Solyndra did lots of R&D with government help so it was not productive !!!

 

[oldfart]

Cheers for all that, very interesting.

A couple of questions;
Why would you weight a larger GDP greater than a small one for this sort of exercise?
Isn't the study intended to assess how economies react to debt - I would have thought that the size of the economy would make no difference?

Also, do you have some links or information demonstrating the influence that they had on the reaction of economists and governments to the recession?
I understand, for one thing, they gave a presentation to 40 senators not long after they published their report.

Thanks for a thoughtful reply!

To the first question, a weighted average is considered more accurate for a couple of reasons. First, it minimizes sample size error. If you are going to treat Iceland as having the same weight as the United States, then some local conditions like a failure of three banks (what Iceland had at the start of their panic) can distort numbers compared to larger economies. It would seem weird if most of Europe was having declining growth for example, but a few nations had spectacular growth because of a great fishing year and the average was up.

Second, both debt and growth are highly serially correlated; meaning that high growth economies tend to continue to grow fast and high debt countries in the past tend to have high debt in the future. This can make a hash of statistical analysis, and there are a few commonly used techniques which adjust for this, one being using weighted averages and another using growth rates rather than absolute levels.

For the second question, there are some cites in my quotes of Konczal: the fuller quote would be

n 2010, economists Carmen Reinhart and Kenneth Rogoff released a paper, "Growth in a Time of Debt." Their "main result is that...median growth rates for countries with public debt over 90 percent of GDP are roughly one percent lower than otherwise; average (mean) growth rates are several percent lower." Countries with debt-to-GDP ratios above 90 percent have a slightly negative average growth rate, in fact.

This has been one of the most cited stats in the public debate during the Great Recession. Paul Ryan's Path to Prosperity budget states their study "found conclusive empirical evidence that [debt] exceeding 90 percent of the economy has a significant negative effect on economic growth." The Washington Post editorial board takes it as an economic consensus view, stating that "debt-to-GDP could keep rising — and stick dangerously near the 90 percent mark that economists regard as a threat to sustainable economic growth."

So this is a cornerstone of the Ryan budget. Also note that neither Ryan nor WaPo even admits that there are any other views. The Washington Post says "economists regard", not "some economists". This has become a meme on the right regardless of its truth, so it doesn't have to be proven anymore. It's presumed to be true.

 

[EdwardBaiamonte]

It is commonly thought that the huge debt is a drag on the economy, Paul Ryan and the GOP have adopted this putative as a basis to attack Obama, toss Bush II under the bus and impede efforts to create jobs, stimulate the economy and repair, replace and renovate our aging infrastructure.

What if Ryan and the GOP are wrong?

See:

How a student took on eminent economists on debt issue - and won

Is it ethical for the US to spend more than it can feasibly pay back in the future?

When the debt grows so big that there's no conceivable way of paying back our lenders, who exactly loses out?

we all lose out because we have to pay off the debt in higher taxes rather than enjoy the money we earn! Plus, economic growth and our standard of living suffers as we have less saving and investment!

 

[oldfart]

as I said, the corrected data shows growth to be double when debt is low. Rogoff says the corrected data does not change the conclusion of his research although it does somewhat reduce the value of low debt.

First I congratulate you on making an intelligent reasoned response.

Rogoff believes that his data still shows a correlation between higher debt-to-GDP and slower growth. But he claims that he has made no assertion as to causation. Arindrajit Dube has a study out indicating that the causality is the reverse; low growth rates cause high debt-GDP ratios. The implication is that the best way to reduce debt-GDP is to stimulate growth, not try to reduce debt. This comports with the experience of the last five years.

And remember that just about every other researcher who has looked at Rogoff's data and methodology believes that when appropriate corrections for his methodological errors are made (not just the "coding error" he has admitted to), his results about a 90% threshold disappear. Just throwing all the data for Australia, New Zealand, and Canada in that he inexplicably omitted makes a big difference. So I respectlully suggest that Rogoff has been caught cooking the data, has not responded to his critics, and that his protestations about still being right are factually wrong and self-serving.

In any case, the research supports common sense in that the more bureaucrats spend or waste the less an economy can grow.

I'm not sure what you are driving at here. I don't want to rehash the whole Say's Law--"crowding-out effect" debate which is obviously not applicable to situations with high levels of underutilized resources such as we have now.

I also think what government spends money on (or private business for that matter) makes a difference. Waste is economically detrimental whether it is public or private; it distorts markets. Good investment projects promote long term growth, whether they are public or private.

Moreover, the research is probably not that important anyway in the it measure only one variable: debt/GDP. It is obvious that a country could have no debt and no growth given enough other liberal anti growth policies.

Good statistical analysis can separate out the effects of various variables on a given dependent variable. Most people's eyes glaze over when they see the regression equations, but that's where the action is in econometrics!