Economy

Another Win for Keynesian Economics

Here's some wonk for you. Ugo Panizza and Andrea Presbitero have determined that the national debt slows economic growth -- sounds like a win for fiscal conservatives and budget hawks. But the reason for the slowed growth is, yes, the budget hawks who cut spending. Suzy Khimm from Ezra's place summarizes further:

...high debt levels aren’t directly responsible for the economic slowdowns that typically accompany them. Instead, the economy can slow because high debt often prompts policymakers to impose fiscal austerity measures that can hamper the economy, particularly one that’s already in recession.

We also have to remember that many of the current austerity-driven conservatives are only pushing for debt and deficit reduction because they're trying to sabotage the economy and, subsequently, the president.