Economists Disagree With Paul Ryan’s Claim That ‘Debt Is Crushing Our Economy’

Over the past three years, House Budget Committee Chairman Paul Ryan (R-WI) has repeatedly introduced budget resolutions that contain draconian spending cuts in an effort to stave off the debt crisis he says is right around the corner if it isn’t addressed immediately. Ryan’s plans, all three of which have passed the House of Representatives, would almost surely add to the debt instead of decreasing it, but his main view is that America’s current level of debt is weighing down the economy, a claim he repeated to Fox News’ Greta Van Susteren Thursday night.

“The debt is crushing our economy, it’s slowing us down, and it’s guaranteeing the next generation has a diminished future,” Ryan said. “And we believe we have a moral obligation to balance this budget to get a healthier economy and create jobs.”

The source of those claims is a paper by Carmen Reinhart and Kenneth Rogoff that shows that economies grow more slowly when their debt-to-GDP ratios are in excess of 90 percent. But as Bloomberg reports, there is no economic consensus around those findings, especially when it comes to large economies like the United States:

“The argument that heavy debt loads slow economic growth doesn’t hold a lot of water,” says Guy LeBas, chief fixed- income strategist at Janney Montgomery Scott LLC in Philadelphia who oversees $12 billion. “It suffers from a mix-up of cause and effect: When weak economic conditions arise, it tends to encourage deficit spending, which is what has led to more U.S. debt being issued, and not the other way around.” [...]

“The Rogoff-Reinhart 90 percent is really quite a fragile number,” says Joseph Gagnon, a former economist in the Fed’s monetary affairs division. “There is no threshold like that for countries that have control of the currency they borrow in.”

Moreover, there is no evidence that the debt is threatening the United States in the short-term. Borrowing costs are at historic lows — as Bloomberg notes, the cost of paying off the debt is lower today than it was when Ronald Reagan was president and financial markets are “begging” the U.S. to borrow. Instead, there is plenty of evidence that the focus on debt and deficit reduction has slowed the economic recovery. Government spending has plateaued since the 2009 stimulus effort that kickstarted the recovery, so while government spending traditionally pulls the economy out of recessions, spending cuts hampered efforts to boost the economy this time.

Investments to help the economic recovery now would fuel growth that reduces deficits and, thus, improve America’s long-term debt outlook as well. The current crisis facing the U.S. isn’t a debt crisis, but rather an unemployment crisis that is being exacerbated by lawmakers who focus too much on the debt.

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Afghan President Lodges Another Ridiculous Claim Against U.S. Troops

Afghan President Hamid Karzai

Afghan President Hamid Karzai, never one to mince words, on Sunday told the press that the United States and Taliban were each colluding to keep foreign troops in Afghanistan, albeit for different reasons.

Several explosions ripped through Afghanistan over the weekend during U.S. Secretary of Defense Chuck Hagel’s visit, killing 19 civilians and highlighting security concerns that continue apace ahead of a U.S. withdrawal from Afghanistan in 2014.

According to Karzai, the attacks by the Taliban were meant to show that international forces will still be required after the 2014 deadline passes. Karzai chose a curious time to air his theory, putting it forward while delivering a speech on Afghan women:

“The explosions in Kabul and Khost yesterday showed that they are at the service of America and at the service of this phrase: 2014. They are trying to frighten us into thinking that if the foreigners are not in Afghanistan, we would be facing these sorts of incidents” he said.

Defense Department officials quickly cancelled a planned joint press conference after Karzai’s statements, denying the cancellation had anything to do with Karzai’s statements. The head of the International Security Assistance Force (ISAF) — the coalition headed by the U.S. in Afghanistan — strongly denounced the idea that the U.S. would work with the Taliban to keep U.S. forces in the country. “We have fought too hard over the past 12 years. We have shed too much blood over the past 12 years. We have done too much to help the Afghan Security Forces grow over the last 12 years to ever think that violence or instability would be to our advantage,” said Marine Gen. Joseph Dunford.

Karzai has a lengthy history of inflammatory statements, usually intended to provide himself some form of leverage when dealing with his Western counter-parts or bolster himself domestically. In 2010, Karzai threatened to join Taliban after coming under pressure to launch reforms in the Afghan government. Karzai also warned against the continuation of NATO airstrikes in 2011, saying that NATO risked becoming an occupying force, adding that “history shows what Afghans do with trespassers and with occupiers.”

Tensions between the U.S. and Afghans stretch beyond difficulties in relations with Karzai. Reports on Monday say an Afghan police officer opened fire killing two U.S. troops and three of his fellow officers. These “green on blue” attacks — in which Afghan allies turn on their Western counterparts — have proved to be an ongoing impediment to lasting trust between U.S. and Afghan forces. Gen. John Allen, then the U.S. commander in Afghanistan, told 60 Minutes that coalition troops were willing to sacrifice for the Afghan campaign, but unwilling to be murdered.

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Politico’s Arresting, COMPLETELY UNSUPPORTED, claim about African-American voters.

(Via Hot Air) Specifically, North Carolinian voters on Tuesday’s Amendment One vote banning same-sex marriage:

African-Americans voted 2-1 in favor of the North Carolina amendment banning gay marriage Tuesday, but the White House is betting that black voters there and beyond will stick with the president, despite broad resistance to legalization.

…and that’s it. There’s no backup for that at all in the article. The question is of some interest – African-American opposition to California’s same-sex marriage laws gave social conservatives a completely unexpected victory on 2008's Election Night – but if there are actual exit polls publicly available then I have yet to see them. For that matter, ABC News reported today (May 10, 2012) that there was no exit polling in North Carolina for Amendment One. At all.

So where did Politico get that number?

Moe Lane (crosspost)

PS: While we’re on the subject of not linking to things, the April Pew poll that Politico referenced can be found here. Opposition/Support for same-sex marriage among Black voters went from 63/26 in 2008 to 49/39. I am uncertain as to why they didn’t link to this poll…

Ah. Of course.  The author may have… issues… with the Second Amendment.

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Did Elizabeth Warren (D CAND, MA-SEN PRI) actually claim minority status for her own benefit, after all?

Alternate title: I was wrong about Elizabeth Warren.

I hate to admit being wrong, of course, but I’m pretty much stuck here.  You see, last week I RedHotted a post where in passing I more or less indicated that I didn’t think that it was particularly fair to ding MA senatorial candidate Elizabeth Warren for her claims of Native American ancestry.  When I read the story, it seemed that she had merely repeated it as an anecdote from her family history – which is to say, something that I’ve done myself (family history claims a Huron great-grandmother; I have no evidence whatsoever for this).  I also didn’t really think that it was all that big a deal that Harvard University was claiming minority status for her for a time; universities do weird things for publicity, she wasn’t running for office when it happened, and besides, Harvard stopped doing that a while back anyway.  I figured that there were more important things that I could be doing with my time.

Well.  This is what happens when you trust the ethical sense of a progressive politician.  It turns out that Elizabeth Warren in fact claimed minority status:  specifically, in the “Association of American Law Schools’ annual directory of minority law teachers” (H/T: @CoonDawg68) from 1986 to 1995 (more about this at The Volokh Conspiracy (via Instapundit), which also has some interesting details about  ‘racial fraud’ as a legal concept in Massachusetts).  As the Boston Herald helpfully notes, universities would have had access to this information… which, presumably, would include their hiring committees.  Are we really expected to believe that Harvard University didn’t consult the AALS minority directory as part of their vetting process?  In fact, are really expected to believe that the University of Pennsylvania didn’t, either?  – Because I don’t, and that means, again, that I was wrong.  And I’m sorry about that.

Meanwhile, and very much to pile on the liar, there’s this additional piece of Elizabeth Warren mendacity, courtesy of the NY Post:

As recently as January, [Elizabeth] Warren was still crying poor, saying on MSNBC: “I realize there are some wealthy individuals — I’m not one of them — but some wealthy individuals who have a lot of stock portfolios.”

No, she has mutual-fund portfolios. Her financial disclosures put her worth between $4.6 and $14.5 million.

I should probably note for the record that when this came out it raised eyebrows from The Daily Caller to The Huffington Post, although everybody at the time looked more at her net worth than at the way Warren held her wealth.  It’s still representative of the essential unreliability of the candidate: after all, there’s nothing wrong with being wealthy.  My family is not making anywhere like this kind of money, and we are doing fine; I don’t resent Elizabeth Warren her money.

I do resent being lectured to on economic affairs by a rampaging, hypocritical opportunist.

Moe Lane (crosspost)

PS: You know what Scott Brown‘s never done?  Condescended to me about my middle class travails when he’s been insulated from them for over a decade via a Ivy League bubble.

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