"11 Republicans Who Cited A Faulty Study To Push For Drastic Spending Cuts"
Advocates for rapid deficit reduction have long used a study from economists Carmen Reinhart and Kenneth Rogoff, which argues that countries that carry debt burdens in excess of 90 percent of their total economy see slower economic growth, to prop up their argument. There were always problems with the study that kept other economists from taking it as gospel, but new research published this week found fundamental flaws in the study’s methodology.
That has blown a hole in the already-shaky argument that the U.S. is approaching a debt crisis and is thus in need of rapid fiscal consolidation. That means these 11 Republicans who have often cited Reinhart and Rogoff’s paper are going to need new evidence to support their austerity agenda:
Rep. Paul Ryan (R-WI): “Economists who have studied sovereign debt tell us that letting total debt rise above 90 percent of GDP creates a drag on economic growth and intensifies the risk of a debt-fueled economic crisis.” [6/23/2011]
Sen. Jeff Sessions (R-AL): “Four major academic studies have shown that gross debt in excess of 90 percent of GDP results in weaker economic growth.” [3/14/2013]
Rep. Dave Camp (R-MI): “Independent economists have found that debt loads greater than 90 percent of GDP could result in the loss of up to a million jobs.” [2/15/2012]
Sen. Tom Coburn (R-OK): “If you study [Carmen] Reinhart and [Kenneth] Rogoff and what they said, they know what’s coming. Every country that’s ever had a debt crisis and has printed money has ended up with an inflation problem.” [5/20/2012]
Sen. John Cornyn (R-TX): Well, I — let me ask you about Carmen Reinhart and Kenneth Rogoff have written a book covering 700 years — if I’m not mistaken — of fiscal crises and looked at the impact of — of large debt on economic growth. And they have opined that a debt that exceeds 20 percent — excuse me — 90 percent of the gross domestic product reduces economic growth by about 1 percent. Currently, our gross debt is 106 percent of GDP. And under the president’s proposal, gross debt would reach 97 percent of GDP in 2023. [4/12/2013]
Sen. Rob Portman (R-OH): “[RR] have shown that once a country’s debt burden reaches 90 percent of the economy, you have a significant downturn in economic growth.” [11/28/2011]
Sen. Orrin Hatch (R-UT): “Countries with debt above 90 percent of GDP have growth that is 1 percent below normal, resulting in a loss of 1 million jobs.” [6/29/2011]
Sen. John Thune (R-SD): “Carmen Reinhart and Kenneth Rogoff, have stated that debt in excess of 90 percent can cut our country’s economic growth rates in half. Washington’s policies of reckless spending have put America well beyond this point.” [1/6/2012]
Sen. Roger Wicker (R-MS): “[Reinhart and Rokoff] helps illustrate the lasting harm of high government debt. Their study of public debt in 44 countries revealed that debt levels exceeding 90 percent of GDP are associated with lower economic growth – declining by about 1 percent annually.” [9/10/2012]
Rep. Tom Price (R-GA): “I know from the Reinhart study that — that unless one gets below that 90 percent level and many of us believe it ought to be lower than that, but unless one gets below that, the economies don’t turn around.” [4/11/2013]
Rep. Jeb Hensarling (R-TX): If you look at the history of economies over the last 200 years when their debt exceeds 90 percent of GDP, they start to decline. That’s where we are in America today. [5/17/2012]