Last night Comedy Central Stephen Colbert took aim at the now debunked study done by Karmaen Reinhart and Kenneth Rogoff. He busts the Austerity movement with his satire, backed by quotes, facts, and an interview with the PhD student who has disproven the two Harvard professors much quoted work.
Colbert not only interviews student Thomas Herndon who obtained the spreadsheet, but put together an editorial piece with video clips of the significant numbers of government “experts” quoting the R-R study in support of their efforts to cut government. Great infomercial punctuated with a real American sales pitch, humor.
Rogoff and Reinhart claimed countries with debt to GDP ratios exceeding 90% suffered negative growth of -0.1%. Herndon found within R-R’s own data set countries actually posted positive growth of 2.2%.
Indeed laying off government workers and reducing spending is bad in a time of recession. So if we don’t lay them off and push them to the safety net roles like unemployment and food stamps, the economy gets better…at the rate of roughly $1.50 for every $1 of government spending. A no brainier if we can set aside political party. I bet most of the Austerity movement can’t. We’ll be watching Paul Ryan as he’s been mighty quiet this week. Perhaps he’s been in the back room reworking that budget proposal of his?