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By Tim Price, originally posted on Next New Deal

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The Great Debt Delusion: How Math Keeps Proving Austerity Wrong (The Atlantic)

When will deficit hawks learn to Konczal-proof their research? First there was the Alesina-Ardagna paper. Roosevelt Fellows Mike Konczal and Arjun Jayadev poked holes in that one. Then Reinhart-Rogoff became the new holy grail. See how well that worked out?

How influential was the Rogoff-Reinhart study warning that high debt kills growth? (Quartz)

Tim Fernholz notes that Reinhart-Rogoff was the little Excel error that could. Cited by everyone from Paul Ryan to Tim Geithner, it's shaped the economic debate in the U.S. and Europe. With a result that useful, who has time to worry about "data" or "methods"?

How the IMF became the friend who wants us to work less and drink more (WaPo)

Neil Irwin writes that while the International Monetary Fund has traditionally played the heavy when it comes to advocating "tough" fiscal measures, policy's gone so far off the rails that it's been forced to step in and suggest countries ease up on the self-flagellation.

At Least the Big Banks Are Kickin' It... (On the Economy)

Jared Bernstein notes that banks like Goldman Sachs are adjusting well to increased regulation, as their multibillion-dollar quarterly profits would attest. But Main Street's not getting totally left behind: weekly earnings for middle-wage workers jumped 0.1 percent!

Big Corporations Won't Be Sweating the IRS This Year (MoJo)

Stephanie Mencimer writes that although corporations have faced increased public scrutiny for their tax-dodging, cutbacks at the IRS mean there will be 18 percent less effort devoted to auditing them. Time to get those creative juices flowing, accounting teams.

Taking the 'service' out of the service sector (WaPo)

Harold Meyerson writes that the experience of companies like J.C. Penney, Wal-Mart, and McDonalds, which have tried to boost profits by cutting staff and holding down wages, suggests that miserable workers don't leave customers whistling a happy tune.

How student debt is holding back the housing market (Think Progress)

Bryce Covert writes that college grads who might have once dreamed of setting out and buying their own homes have been forced to scale back their ambitions to perhaps buying their own futons, decreasing demand for construction of single-family homes.

The Hell of American Day Care (TNR)

Jonathan Cohn looks at the state of America's formal child care system, such as it is: unsafe, unregulated, unavailable or prohibitively expensive to many, but also the only option many working parents have until policymakers notice that it's no longer 1953.

Tim Price is Editor of Next New Deal. Follow him on Twitter @txprice.

Originally posted to Daily Kos Economics on Wed Apr 17, 2013 at 07:21 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  If not RR, it would (4+ / 0-)
    Recommended by:
    raboof, tardis10, Gooserock, 714day

    Have been something else.   The austerity polcies are class driven, not empirically driven.  The Koch Brothers have bought several economcis departments at universities, see, e.g. George Mason, and they would have churned out a fig leaf study to bve used.  

    Join us on the Black Kos front porch to review news and views written from a black pov—everyone is welcome.

    by TomP on Wed Apr 17, 2013 at 07:31:11 AM PDT

  •  I think the article on student debt is good, (3+ / 0-)
    Recommended by:
    antirove, tardis10, Odysseus

    but I think there is more to the problem then just student loan debt. I think a lot of young people are avoiding buying homes because they don't have secure jobs.

    A recent MSNBC survey shows that 53% of all college graduates under the age of 25 are either unemployed or underemployed
    It's very hard to make a long term financial commitment when you don't feel you have long term financial stability. I am 25 and currently living in an apartment that costs more per month than some single family homes would, but because my fiance can't find a teaching job I can't afford to make any long term commitments.

    The student loan debt is annoying, but if secure jobs were available I think a lot more people would be able to pay off that debt and feel comfortable taking on more debt.

    •  LGM blog has long held most grad and much under (1+ / 0-)
      Recommended by:
      JeremySchro

      grad education does not have an economic payback.  At this point I am inclined to believe it as I watch one relative working on a Masters in Journalism facing worse than bleak job prospects while a son in law who opted for CC and training in HVAC is now making more than $50K and ample opportunities to moonlight

      •  The problem with that is (0+ / 0-)

        with a specialized CC or vocational education you will normally hit your ceiling a lot earlier than people with college/post grad education. I think the benefits pay off further down the road, which can be frustrating.

        •  here in the South there is no top for a HVAC man (0+ / 0-)

          My son in law is moving on up the ladder to spec bids now as his superiors pull out to start their own companies; heck one of them even has a boutique HVAC service for upscale folks who just can't live w/o ac for more than 30 seconds

  •  Corrupt or Incompetent? (2+ / 0-)
    Recommended by:
    tardis10, 714day

    That would seem to be the question. Given R&R's trollish response to being busted, after stonewalling their data long enough to do damage...

  •  just finished talking with broker (0+ / 0-)

    about how I should invest the $100 windfall I should get from filing my taxes.  I just don't know how the Koch bros. manage to handle wealth of this amount.  At least this moves me from the ranks of the moochers and parasites on the system for the rest of the day.

    His take is that Euro may be on its way out.  So long as US resists the urge to austericize its economy (yay I have a neologism) and French and German bankers continue to cram austerity down the craws of the likes of Portugal, Spain, Crete, Greece, and Italy among others, for those in stocks, there is the possibility for profit.

    OTOH his take is that there may be a buy opportunity should the US embrace austerity because he expects the DJIA would tank to 2007-2008 levels.  (BTW house down the road just sold for $174K when it was purchased in 2005 for $400K so the recovery for the US appears spotty at best)    

  •  I appreciate the link to the RR flim-flam. (0+ / 0-)

    I'm amazed at the number of people who don't know about it, let alone the bogus defense it gave to austerity pushers. The latter are either idiots or cynics or both. They fiddle while Rome burns, in any case.

  •  Social Security Benefit Cuts (0+ / 0-)

    Are supported by Jared Bernstein (mentioned above) as well as cbpp.org, including the president Robert Greenstein and fellow, Henry J. Aaron.

    It doesn't seem right for Dr. Bernstein (a Ph.D., but not in economics) to receive publicity for his writings on this or any other liberal/progressive/working class site.

    If I was a communist, rich men would fear me...And the opposite applies. The history of all hitherto existing society is the history of class struggles.

    by stewarjt on Wed Apr 17, 2013 at 12:22:44 PM PDT

  •  Good one on Rogoff (0+ / 0-)

    Now to debunk Holtz-Eakin.
    I can't stand lying GOP 'economists'.

    I've looked into his eyes. He's pure evil!

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