Thursday, June 21, 2012

That ObozoDebt: A Turd in the Legacy Punchbowl

Obozo will have a legacy, alright.  And the turd will be the ObozoDebt.

Anyone who's checked the latest jobless data knows President Obama's massive stimulus failed to stimulate anything but $5 trillion in new debt. Now it turns out this debt could hamper growth for years to come.

The study, published recently by the National Bureau of Economic Research, looked at 26 episodes in advanced economies since the early 1800s where gross public debt levels exceeded 90% of GDP for at least five years.

What they found was alarming: When countries run debt levels that high, average growth rate is significantly below low-debt years — 2.3% on average vs. 3.5%.

Worse, the study also found that once countries run debt up to that level, it can take years, if not decades, to bring it back down. In fact, 20 of those high-debt episodes lasted more than a decade, and the average duration was 23 years.

Combine the two, and what you get is "a massive cumulative output loss," according to the study's authors.

Twenty three years of retarded growth.  Meantime, Obozo will be golfing.


J. Strupp said...

Did the NBER (or Rogoff and Reinhart for that matter) ever consider that the 90%+ public debt levels were CAUSED by a fall in GDP and not the other way around?

They have it wrong. High public debt levels aren't ideal but there is no indication that our current debt levels are crowding out private investment.

Saint Revolution said...

Is Strupp serious?!

There's also absolutely no proof that any bug is ever dead when you squash it. Whaddya gonna do...ask it if it's dead?! Beyond that, it's ALL circumstantial...

Ask any small business owner about lack of future enterprise investment and why and you'll have all the causal relation you need.

Strupp...moron illogic.

neomom said...

There is no such thing as too much government spending and debt for Strupp. Been reading his Keynes cheer leading for years on here.

Dad29 said...

...the 90%+ public debt levels were CAUSED by a fall in GDP and not the other way around?

Of course not. They are not insane.

Anonymous said...

Quite a legacy left us by the Bush/Boehner/Frist years. We'll be paying that down for evah.

Anonymous said...

Vox on OBOZO's Murderous Legacy......

Vox cites Liber dismay as well from Hells Bible

.............The murderous precedent has been set, and it is the imperial power of the presidency to unilaterally declare death sentences that will be the chief legacy of... OBOZO