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comment by user-inactivated
user-inactivated  ·  4227 days ago  ·  link  ·    ·  parent  ·  post: Mike Konczal: Researchers Finally Replicated Reinhart-Rogoff, and There Are Serious Problems.

You can't call any of these 'exact numbers' in any sense though. As nice as it would be to have a road map to economic success, these are samples without controls like almost all economic science. Everything you see is an analysis of an extremely complex system with an excel sheet. Exact numbers do matter, but we don't have them.

Maybe if reducing the deficit was practiced at any time in the United States then we could talk about 'if' and 'when' but I say better late than never. We simply do not have enough data to move beyond common sense yet.





mk  ·  4227 days ago  ·  link  ·  

I agree that all these numbers are very debatable.

    Maybe if reducing the deficit was practiced at any time in the United States then we could talk about 'if' and 'when' but I say better late than never.

Well, in recent history, it was practiced by the Clinton administration. But IMHO common sense says: don't treat a country's budget like that of a household. The EU is giving us plenty of present day examples of why austerity in a contraction leads to more contraction. By far, the biggest contributor to the recent deficit was loss of revenue due to contraction, and actually, the US deficit is shrinking as we speak as the economy continues to add jobs. Clinton didn't get a surplus due to austerity measures, it was due to an economic boom. Common sense says we should have continued to pay down the debt at that time when we could have without causing a contraction.

user-inactivated  ·  4227 days ago  ·  link  ·  

We're close to on the same page. I agree that our currently high deficit is due to revenue vs expenditures which have grown wildly out of balance in the recession. And I agree that Clinton's budget surplus was due to economic growth, but Clinton also increased taxes and reduced spending in social welfare programs - austerity. And even then, it was only 3 years before Bush screwed it up.

mk  ·  4227 days ago  ·  link  ·  

Yes, when responsible fiscal behavior would bring the biggest dividends, the political incentive to practice it is the least.

user-inactivated  ·  4227 days ago  ·  link  ·  

Can you imagine how this conversation would have gone on Reddit?

mk  ·  4227 days ago  ·  link  ·  

:)