Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Grad Student Who Shook Global Austerity Movement

nymag.com

Post reply on HN
Print view View original

31–40 of 112 posts

Re: Grad Student Who Shook Global Austerity Movement

#31

Post by dualogy »

iwwr wrote: post #6

So what is the alternative to lowering "consistently high public debt"? Monetize it? Default on it? Debt in itself is not a problem if the growth rate is the same or decreasing as a proportion of the economy. At the current rate, some obligations would have to be forfeited, either to the direct creditors, or to those promised social services. Strangling the economy further with high taxes only makes the problem worse…

> Monetize it? Default on it?

Not that there is a difference in real terms...

Re: Grad Student Who Shook Global Austerity Movement

#32

Post by [deleted] »

confluence wrote: post #18

You would be surprised how many things that exist around you are based around faulty models based on incorrect data - that's the problem with higher dimensional fields like economics and finance - it's hard to separate cause and effect and extract principal signals for an arbitrary phenomena, without getting bogged down in correlation hell. You have been warned - the further fields get from pure mathematics and isola…

[deleted]

Re: Grad Student Who Shook Global Austerity Movement

#34

Post by AutoCorrect »

knowtheory wrote: post #26
confluence wrote: post #18

You would be surprised how many things that exist around you are based around faulty models based on incorrect data - that's the problem with higher dimensional fields like economics and finance - it's hard to separate cause and effect and extract principal signals for an arbitrary phenomena, without getting bogged down in correlation hell. You have been warned - the further fields get from pure mathematics and isola…

> Also - who on earth thought austerity was ever a good idea? David Cameron, Angela Merkel and Paul Ryan to name just three prominent politicians. Additionally EU central bank policy has been geared almost solely around this principle. This is why after identifying that the Greek, Cypriot and Spanish economies were the victim of cheating, malfeasance and incompetence, all of the rescue plans involved pretty severe cu…

and then there's Iceland. They did it right and told the banks to go pound sand.

Re: Grad Student Who Shook Global Austerity Movement

#35

Post by slikts »

Lazare wrote: post #20
[deleted] wrote: post #9

[deleted]

Naa. The paper came out in 2010, after much of the austerity debate had already crystallised, and got attention almost entirely in the US, which hasn't really implemented austerity. (No, the sequester really doesn't count.) Nor did the paper argue strongly in favour of austerity; the authors actually are pro-stimulus, and Rogoff in particular was very concerned over the effects of the Fiscal Cliff. Actual austerity h…

> Nor is this surprising; the reason nobody looked too closely at the numbers is because they agree broadly with every other paper and model out there.

The data Reinhart and Rogoff used hadn't been analysed together before so their work was original, and it got widely cited. The results failed to be reproducible, and now the analysis has been found to have multiple methodological errors, of which the spreadsheet error is just a minor component. Reinhart and Rogoff didn't cause austerity, but they published a high impact paper supporting austerity that has now been discredited. Also, it would be interesting to know how you get the impression that their results "agree broadly with every other paper and model out there".

Re: Grad Student Who Shook Global Austerity Movement

#36

Post by AutoCorrect »

Nursie wrote: post #21

Austerity is something the government should be practicing in the good times, instead of blowing everything on profligate rubbish. That way when the downturn comes, you're not already saddled with masses of debt and a vast public system that depends upon it. IMHO, of course, I am am not an economist. Not that they seem to agree on much either.

yep, sustainability is not just for the biosphere, it's for the econosphere too. It's great to provide big benefits to everyone, but then when things turn down, we get the mess we are in today.

Re: Grad Student Who Shook Global Austerity Movement

#38

Post by squozzer »

What seems at issue -- besides whether an economist's work should be accepted at face value -- is under what conditions a country should borrow or impose austerity.

Here's an analogy --

When times are good, governments frequently raise taxes, because hey, we can afford it.

When times turn bad, governments frequently raise taxes, because hey, our tax base has eroded and we need it.

It's a "heads I win, tails you lose" game.

Re: Grad Student Who Shook Global Austerity Movement

#39

Post by bromang »

slikts wrote: post #35
Lazare wrote: post #20

Earlier quoted context omitted.

Naa. The paper came out in 2010, after much of the austerity debate had already crystallised, and got attention almost entirely in the US, which hasn't really implemented austerity. (No, the sequester really doesn't count.) Nor did the paper argue strongly in favour of austerity; the authors actually are pro-stimulus, and Rogoff in particular was very concerned over the effects of the Fiscal Cliff. Actual austerity h…

> Nor is this surprising; the reason nobody looked too closely at the numbers is because they agree broadly with every other paper and model out there. The data Reinhart and Rogoff used hadn't been analysed together before so their work was original, and it got widely cited. The results failed to be reproducible, and now the analysis has been found to have multiple methodological errors, of which the spreadsheet erro…

I suspect it isn't hard to find papers that show a link between high debt levels and weak economic growth. Or do you think the consensus among economists is that no such relationship exists?

Re: Grad Student Who Shook Global Austerity Movement

#40

Post by pmorici »

knowtheory wrote: post #27
iwwr wrote: post #6

So what is the alternative to lowering "consistently high public debt"? Monetize it? Default on it? Debt in itself is not a problem if the growth rate is the same or decreasing as a proportion of the economy. At the current rate, some obligations would have to be forfeited, either to the direct creditors, or to those promised social services. Strangling the economy further with high taxes only makes the problem worse…

Depends what your borrowing situation is. During the financial crisis, irrespective of our level of public debt, the bond rates were actually such, that people were basically PAYING the federal government to borrow money. Instead, we had politicians on an austerity tear, and ranting about how we needed to reduce the national debt. We could have borrowed a big chunk of money, earned the interest off of it, and then ju…

One of the reasons rates have remained so low is because the Federal Reserve has bought over 3 Trillion in debt including just shy of 2 Trillion dollars of the US Governments debt. If debt isn't a problem then why is the Federal Reserve continuing to buy US Treasuries which has the effect of suppressing interest rates.

http://www.reuters.com/article/2013/04/18/us-usa-fed-discoun...

Post reply on HN