Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Excel Error Contributes To Problems With Austerity Study

Unknown Lamer posted about a year ago | from the canada-isn't-real-anyway dept.

Stats 476

quarterbuck writes "Many politicians, especially in Europe, have used the idea that economic growth is impeded by debt levels above 90% of GDP to justify austerity measures. The academic justification came from a paper and a book by Kenneth Rogoff and Carmen Reinhart. Now researchers at U Mass at Amherst have refuted the study — they find that not only was the data tainted by bad statistics, it also had an Excel error. Apparently when averaging a few GDP numbers in an excel sheet, they did not drag down the cell ranges down properly, excluding Belgium. The supporting website for the book, 'This time it is different,' has lots of financial information if a reader might want to replicate some of the results." The Excel error is making the rounds as the cause of the problems with the study, but it's actually a minor component. The study also ignores some post-WWII data for countries that had a high debt load and high growth, and there's some fishy weighting going on: "The U.K. has 19 years (1946-1964) above 90 percent debt-to-GDP with an average 2.4 percent growth rate. New Zealand has one year in their sample above 90 percent debt-to-GDP with a growth rate of -7.6. These two numbers, 2.4 and -7.6 percent, are given equal weight in the final calculation, as they average the countries equally. Even though there are 19 times as many data points for the U.K."

cancel ×

476 comments

Sorry! There are no comments related to the filter you selected.

Does High Public Debt Consistently Stifle growth? (5, Insightful)

BlackPignouf (1017012) | about a year ago | (#43470317)

Does High Public Debt Consistently Stifle Economic Growth?

No, finite resources do.

Re:Does High Public Debt Consistently Stifle growt (4, Insightful)

Taco Cowboy (5327) | about a year ago | (#43470461)

Does High Public Debt Consistently Stifle Economic Growth?

No, finite resources do.

High public debt drains away valuable resources faster than low public debt
 
Given the same amount of initial resource, a country with high public debt will have smaller chances for recovery
 
But then again, most economies (other than that of North Korea) are dynamic, and the amount of resource fluctuates

Re:Does High Public Debt Consistently Stifle growt (4, Interesting)

mcgrew (92797) | about a year ago | (#43470525)

But then again, most economies (other than that of North Korea) are dynamic, and the amount of resource fluctuates

That depends on what you mean by "resources." An MBA Romney-style corporate raider considers "resources" to mean "cash and credit" while someone who isn't a rent-seeking parasite considers things like timber, ore, fuel, and available labor to be resources. The only real resources that fluctuate are labor and renewables.

Resource (4, Insightful)

Taco Cowboy (5327) | about a year ago | (#43470581)

The only real resources that fluctuate are labor and renewables

I guess you are not in the high tech field

As one in the tech field since the 1970's, one very real resource that I count on is BRAIN-POWER, aka, ideas

Timber can cut into wood for burning, or could be turned into tables and chair by carpenters, or could be used for building a dormitory, or, in the hands of master crafter like Stradivarius, becomes his world famous violins

Re:Resource (1)

ilguido (1704434) | about a year ago | (#43470657)

Brain-power is resource-powered.

Re:Does High Public Debt Consistently Stifle growt (1)

Anonymous Coward | about a year ago | (#43470617)

Does £2,000 per household per year to pay for just interest on the debt (in UK in 2012) say that it's stifling economic growth?

The UK has had much higher debt ratios in the past. It equalled 30 years of tax revenue after the war with France and Spain in the early 19th century. It took most of the century to pay it off, when Britain had more than the US' current stature in the world and was plundering everybody else's resources. It also reached over 200% GDP after the Second World War. Thank goodness for favourable loans from the US to fund the debts from war, that were finally paid off in the last decade.

As everybody can see from the situation with Greece and the other European PIGS, excessive debt means you've surrendered control of your own destiny. You're forced to service those debts which is a distraction from promoting growth.

Excel error? (5, Insightful)

Richard_at_work (517087) | about a year ago | (#43470321)

When I read the title, I expected a calculation or rounding issue, or an internal range issue from built in components and not "dumb ass user didn't set the range correctly when averaging". That's not an Excel error, that's a user error - Excel did exactly what it was told to do.

Re:Excel error? (1)

BlackPignouf (1017012) | about a year ago | (#43470341)

GDP = 77.1*850

Re:Excel error? (0)

roman_mir (125474) | about a year ago | (#43470393)

You should know by now, everything that computers do that the users did not mean them to do, regardless of what the user actually told the computer to do is a computer problem.

Re:Excel error? (5, Insightful)

Rhywden (1940872) | about a year ago | (#43470443)

"On two occasions I have been asked, 'Pray, Mr. Babbage, if you put into the machine wrong figures, will the right answers come out?' I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a question."

Re:Excel error? (5, Interesting)

Anonymous Coward | about a year ago | (#43470765)

There's an arguement that this wasn't ignorance on the part of the person asking the question, rather it was a polite way of asking whether the machine was rigged to give only the answer to the single question it was given.

Re:Excel error? (-1, Flamebait)

ArsenneLupin (766289) | about a year ago | (#43470405)

It was a mistake while selecting the cells to calculate the average on (inadvertedly excluding Belgium).

That's still Excels fault for:
a) making this not obvious to spot, and
b) being marketed in such a way that people believe that any idiot should be able to use it... while actually, thought and care are still required.

If you make a product pandering to idiots, don't be astonished if only idiots and frustrated people *) use it, producting the expected results...
(* The latter being forced to use it by the former in their workplace)

Re:Excel error? (4, Insightful)

Rhywden (1940872) | about a year ago | (#43470435)

Excel marks parameters by drawing coloured borders around the selected range of cells.

I'm not quite sure how one could make it even more obvious without punching the user in the face.

Unless, of course, you expect a strong AI to reside inside Excel which is able to distinguish between what the user wanted and what he actually did.

Re:Excel error? (5, Funny)

Anonymous Coward | about a year ago | (#43470463)

Unless, of course, you expect a strong AI to reside inside Excel which is able to distinguish between what the user wanted and what he actually did.

Clippy?

Re:Excel error? (5, Interesting)

TheRaven64 (641858) | about a year ago | (#43470559)

I'm not quite sure how one could make it even more obvious without punching the user in the face.

How about by not conflating data, formulae, and layout in the UI? This is an error made by all VisiCalc clones, but not by Improv clones. If you use something like Improv, FlexiSheet or Quantrix then this kind of error is almost impossible to make. If you use something like VisiCalc, 1-2-3, Excel or OpenOffice.org Calc, it is trivial.

Re:Excel error? (2)

mcgrew (92797) | about a year ago | (#43470599)

Unless, of course, you expect a strong AI to reside inside Excel which is able to distinguish between what the user wanted and what he actually did.

Unfortunately, that's what MS tries to do and fails badly at it. Most of my frustration with Excel is it attempting to read my mind and failing miserably at it. That said, despite its shortcomings IMO it's still better than Lotus, Corel, or Oo's spreadsheets. Excel is really the only MS product I actually like (and I hate spreadsheets in general).

Contrast that to Access, the worst clusterfuck of a dbms I've ever used. I miss Nomad on the mainframe and dBase and pre-MS FoxPro on the PC; you told them what to do and it did it. Tell Access what to do and it does something else or argues with you. It frustrated the hell out of me just last week when a screen stopped working that had been fine for years, returning a "return without gosub" error as if I'd been programming in BASIC. Copying that screen to another, empty database, deleting in the real db, and copying it back fixed it.

I suspect that MS puts their least competent programmers on the Access team. I fucking HATE that program, glad I retire next year.

Re:Excel error? (1)

chrismcb (983081) | about a year ago | (#43470453)

That's still Excels fault for: a) making this not obvious to spot, and

Excel typically does a decent job of indicating stuff like this... But it can't do anything when the user ignores it. This is in no way Excel's fault.

Re:Excel error? (1)

serviscope_minor (664417) | about a year ago | (#43470603)

Excel typically does a decent job of indicating stuff like this...

I think you and I have different ideas as to what constitutes decent.

Try accidentely averaging not quite all of an array in any other language (e.g. C++, Octave/MATLAB/ Java, AWK, SQL, Python, Ruby, hell even TCL). You will find that the idiomatic way is always shorter, clearer and correct by comparison.

The big mush o' squares being all variables, data, temporaries and arrays makes excel and its clones hard to write bug free programs in. Make no mistake: they are programming languages, just rather unusual semi-visual ones.

Re:Excel error? (3, Insightful)

Rhywden (1940872) | about a year ago | (#43470707)

Try accidentely averaging not quite all of an array in any other language (e.g. C++, Octave/MATLAB/ Java, AWK, SQL, Python, Ruby, hell even TCL). You will find that the idiomatic way is always shorter, clearer and correct by comparison.

That's an easy mistake for a beginner to do:

1) Simply forget that array indices for most languages begin at zero(0) rather than one(1).
2) Make an error when establishing the termination condition, Like: "i <= array.length" rather than "i < array.length", again, due to forgetting that array indices begin at zero and end at n-1.

Re:Excel error? (1)

Anonymous Coward | about a year ago | (#43470813)

Well.. at least in python you don't even need to know how many elements the array has.

sum(array) / len(array) would do.

or you could use numpy library:

np.mean(array)

pretty hard to make errors there.

Re: Excel error? (0)

Anonymous Coward | about a year ago | (#43470469)

If R&R are too inept to use Excel properly they are not qualified to produce this type of research.
- 1st rule of research: don't talk about research.
- 2nd rule of research: don't screw it up.

Re:Excel error? (1)

lxs (131946) | about a year ago | (#43470629)

You say inadvertently, but omitting Belgium could have been a tribute to Douglas Adams.

Re:Excel error? (1)

Mr_Silver (213637) | about a year ago | (#43470441)

When I read the title, I expected a calculation or rounding issue, or an internal range issue from built in components and not "dumb ass user didn't set the range correctly when averaging". That's not an Excel error, that's a user error - Excel did exactly what it was told to do.

Not to mention that if you use a reasonably recent version of Excel (at least 2003, which is nearly 10 years old), it'll warn you if you're doing something with a range of cells and it thinks you've missed a bunch of them out.

It's not perfect, but it's caught quite a few mistakes that I've made - which is far better than doing nothing.

Re:Excel error? (0, Flamebait)

Anonymous Coward | about a year ago | (#43470477)

Arguably, using excel (with its known to be finnicky automatic conversions for extra user friendlyness, reported on here previously) for research is already an user error, of large enough magnitude to make any research using it suspect.

Call it a sign on the wall. Which is justified here by their sloppy data handling, cherrypicking of data, and other grave scientific no-nos. Concluding: These people are not scientists.

Altough it has to be said that thorougly unscientific "studies" are a staple in policy making. Such as the "piracy" numbers the industry keeps quoting from some UK "study" that nobody can find, yet the relevant government departments keep adding the numbers to internal memor. In fact, real scientists are liable to get fired for science. Again the UK, where the head of the science committee on drugs got fired for not toeing the government policy stance. Where they said "science led policy making" they were actually meaning "policy led science making". Because science cannot be allowed to interfere with policy making but a science-y sauce makes onerous policies go down better, it is hoped.

Re:Excel error? (2)

u38cg (607297) | about a year ago | (#43470625)

I agree it is user error, but I feel very strongly that this is the fault of Excel, not the user. My job is effectively being a professional spreadsheet driver and you eventually learn to become rigid about range checking, row counting, balancing totals, etc, because the structure of Excel makes these errors inevitable.

Re:Excel error? (2)

Diddlbiker (1022703) | about a year ago | (#43470641)

There are two factors in play here.

(1) Likely, they didn't use drag-and-drop to copy the cells, but double-clicking on the fill handle (the same widget used for drag&drop copying) which stops extending the range up to but not including the first neighboring empty cell, not at the end of the table. As such it's perfectly possible to not include the entire cell range while realizing that.
(2) Having said that, one would expect that whoever makes a model with that much impact double checks their model against n00b errors like that. A good model has some functionality built in for cross-checking data, making sure everything adds up, etc.

In the end, this is as much Excel's fault as blaming your calculator when you don't enter all the numbers. But when you release it to the press, "Excel" makes it sound better. Everyone knows that Excel is a Micro$oft product, and that they're evil and conspiring to take over the world.
"Oooh, it's Excel that made the mistake, not you. We'll forgive you for that. We know how evil and sinister they are"

Re:Excel error? (0)

Anonymous Coward | about a year ago | (#43470717)

Agree completely. It's a disingenuous headline designed to get people to click on it.

Re:Excel error? (5, Insightful)

toxicafunk (1367319) | about a year ago | (#43470745)

The real news to me is that academic, world-famous, policy-influencing researchers use Excel instead of, say, R or SPSS, etc.

More Statist Bullsiht (-1)

Anonymous Coward | about a year ago | (#43470331)

Attempting to justify more theft of the public and increased government spending.

It's simple to answer this question, do you want to incur debt or spend money that you have? Anyone who prefers debt is a fucking idiot and shouldn't be trusted.

Re:More Statist Bullsiht (-1, Flamebait)

Anonymous Coward | about a year ago | (#43470347)

Anyone who prefers debt is a fucking idiot and shouldn't be trusted.

And this, right here is why "Libertarian" should be pronounced with a very loud "tard" at the end.

Re:More Statist Bullsiht (5, Insightful)

Fluffeh (1273756) | about a year ago | (#43470355)

Anyone who prefers debt is a fucking idiot and shouldn't be trusted.

That statement is plain daft. It's much too broad. Sometimes debt can be good. For example, getting a mortgage for a home might not be bad. Sure, it would be better to buy with cash and avoid paying all the interest, but if you don't have a pile of cash lying around, you are limited to saving while paying rent. It might actually work out better to get the mortgage.

Also, getting a loan to start a company might be a great way to have enough capital to get to the market quickly and by doing so make a huge profit.

Not all debt is bad. Debt without any plan to pay it off and without evaluating whether the costs of managing the debt outweigh the benefits is bad. The problem is that most political parties these days seem to have a horizon of the next election when it comes to balancing the books. The problem with this sort of debt is that they spend up big and have no real plan to pay it back.

Re: More Statist Bullsiht (-1)

Anonymous Coward | about a year ago | (#43470371)

Yes, all interest-bearing debt is BAD.

It inflates speculative bubbles and causes others to have to take on debt to participate, which robs them of the fruits of their labor. Why should someone have to pay for their house more than two times over to get out from under their mortgage? Combine this with the elimination of risk by the lenders, and you have moon bubbles.

Re: More Statist Bullsiht (0)

Anonymous Coward | about a year ago | (#43470417)

If debt was not interest-bearing, then money would have no value.

Thought experiment: You loan it to me, I give the same amount back to you later, we're both happy with this situation. You can give me an infinite amount of money this way, as you can get it from similar loans yourself. If you can give me an infinite amount of money, then money has no value. Also note that debt without interest perpetuates the borrow-for-ever mentality, as there's absolutely no incentive to pay it off.

-- FatPhil (AC, as without password)

Re: More Statist Bullsiht (1)

Chrisq (894406) | about a year ago | (#43470419)

Yes, all interest-bearing debt is BAD.

Muzzie, are you [dailymail.co.uk] ?

Re: More Statist Bullsiht (4, Interesting)

fuzzyfuzzyfungus (1223518) | about a year ago | (#43470575)

As a historical note, christianity used to have nearly identical rules concerning usury; and the deep suspicion of interest-bearing loans is a least as old as Aristotle(who was Not A Fan).

As time went on, though, a number of... increasingly creative... legalisms were hacked together to allow contractual arrangements that were loans at interest in everything but name. In the case of christianity, the charade was so transparent, and the amount of obviously-loan-backed economic activity so significant, by the early modern period, if not earlier, that almost everyone bowed to the inevitable and "usury" stopped meaning 'charging interest' and started meaning 'charging lots and lots of interest'(and even 'lots and lots' has proven to be pretty flexible).

Islam has not (yet) reached the 'eh, fuck it, sure we charge interest' stage; but let's just say that they are doing some downright jesuitical work at the 'So, what sophistry can we spin to make interest not look like interest?' [bbc.co.uk] stage. The range of products dubbed 'islamic finance' won't say 'interest'; but it will look like a duck and quack like one.

Re: More Statist Bullsiht (1)

Anonymous Coward | about a year ago | (#43470497)

But they said "Anyone who prefers debt is a fucking idiot and shouldn't be trusted."
Not has debt, uses debt or takes on debt, but prefers debt. There is a significant difference.

Re: More Statist Bullsiht (2, Insightful)

Anonymous Coward | about a year ago | (#43470535)

Thank you for using your brain, far too many around here don't bother.

Doesn't anyone who supports big government socialism see that the people encouraging all the debt and deficit spending are *not* the same people paying the taxes, ever? Anyone? Hello?

Good grief.

Re:More Statist Bullsiht (2)

jellomizer (103300) | about a year ago | (#43470505)

Actually if you get a mortgage at a low rate and invest the rest of your money over the 30 years you would have made more money then if you were just buy the house, and invest your existing money.

Re:More Statist Bullsiht (0)

Anonymous Coward | about a year ago | (#43470519)

"Not all debt is bad"

And of course I said nothing indicating it was.

"Sure, it would be better to buy with cash and avoid paying all the interest"

So you agree with me, fine.

Re:More Statist Bullsiht (2)

ethorad (840881) | about a year ago | (#43470529)

I agree with you, debt without evaluating the cost and a plan to manage it is bad news.

However you say "it would be better to buy with cash and avoid paying all the interest"

Sure buying with cash avoids paying interest, however it also avoids collecting interest on whatever else you would have invested in. Essentially buying a house with cash can be considered as investing in property at the mortgage rate of interest. If you can beat that in the market (with a suitable level of security/liquidity) then it's worth condiering a mortgage and investing.

Of course differential tax treatment, stamp duty on house purchase, duration you expect to hold the house/asset, etc all feed in to make it a more complex analysis. YMMV, this is not financial advice, etc

Re:More Statist Bullsiht (0)

Anonymous Coward | about a year ago | (#43470653)

"Essentially buying a house with cash can be considered as investing in property at the mortgage rate of interest"

Not exactly. You are comparing buying a thing with entering into an agreement in which someone else buys a thing and you pay them to be able to use it for whatever (legal) purposes you like. They are not the same even though a mortgage is called 'buying', it isn't.

And note that "differential tax treatment, stamp duty on house purchase" are again tools of the statist and my question is to what end?

Different example, in the US we have just seen the largest government power grab in just about forever forced upon us in the form of Obamacare in the guise of providing better access to healthcare. I ask you this; if the state was truly interested in increasing access to healthcare why didn't they simply and immediately cease collecting income taxes on that portion of income spent on healthcare related expenses? A simple thing to do, immediate and across the board impact directly to the people (which was what they said they wanted to do). Anyone care to guess why they didn't do this?

Yes that's rhetorical.

Re:More Statist Bullsiht (3, Insightful)

AlphaWolf_HK (692722) | about a year ago | (#43470545)

Debt without any plan to pay it off and without evaluating whether the costs of managing the debt outweigh the benefits is bad. The problem is that most political parties these days seem to have a horizon of the next election when it comes to balancing the books. The problem with this sort of debt is that they spend up big and have no real plan to pay it back.

Therein lies the problem. In my opinion, borrowing should be done to acquire capital for investment; not to simply acquire nice things. I think most people are so used to doing that (e.g. credit card debt,) that they don't really pay attention when the government does it either. Many are even fine with the idea that they can just spend until they are upside down, and then file chapter 7. Governments can't do that (if they did when they do - there will be hell to pay.)

Nice things would be (and this is a classic example libertarians point out) things like national endowment of the arts. If any given artwork isn't worth anything to anybody, then why on earth are we paying somebody to make it? I really don't know if any nice things have come of it, but in the end that is all it is - just a nice thing that we don't actually need in the classical sense, and that money should be going towards paying back debts.

Sadly that is lost among posters like the one just above you, who I think probably constitute a majority. I hear many talk about how a subset of Americans don't want to adopt European policies just for the sake of not being like Europe. Ignoring that the reverse is also true (it certainly is) there is also that subset who want to simply follow Europe's lead just for the sake of doing so. I don't think that is a wise idea given the current Eurozone crisis.

There was a time when the roles were reversed - the US tended to follow Keynesian thought more than Europe. That was the great depression. And as it turns out, the US fared far far worse than Europe.

The great depression wasn't caused by the stock market crash, by the way. The crash simply created a panic, but on its own it didn't cause the mess that followed. After the crash, the unemployment rate was about what it is now - floating between 9 and 10 percent, even showed signs of recovery for a brief period. Things didn't get really bad until the government tried to "fix" things. Smoot-Hawly for example, designed to create jobs, raised domestic prices dramatically and dropped exports by half. Domestic production and exports rise and fall with one another, for those who don't know. That followed by heavy deflation, prohibition, FDR declaring bullion as contraband, the new deal, among a bunch of other things that were supposed to "improve humanity" (the prohibitionists identified themselves as progressives, by the way) and only made things much worse.

Notice below how you see the dow begin to recover up until Smoot-Hawly

https://en.wikipedia.org/wiki/File:1929_wall_street_crash_graph.svg [wikipedia.org]

(Strange world we live in how Republicans wanted tariffs, Democrats did not, and now things are reversed with Unions heavily lobbying for tariffs to protect their jobs.)

What do I know though, I'm just another one of those libertarian whackos who still believe that Keynesian theory was shattered when it proposed that stagflation can't possibly happen, but it did anyways.

Re:More Statist Bullsiht (0, Flamebait)

SomeKDEUser (1243392) | about a year ago | (#43470693)

Ahhh, yes, Libertards, the people who believe there is no such thing as an externality, and no such thing as collective preference. Who claim markets are magic -- indeed bargaining, rigidities and information asymmetries are irrelevant -- and always get to optimal pricing instantly. Apparently, they also live in an alternative universe where "Keynesian" US is currently undergoing a triple-dip depression, whereas "austere" Europe is adding jobs and growth month-on-month.

In that alternate universe Mr. Hawley is called "Hawly", too. Presumably, it is also a magical universe where gold supplies automatically match the production of goods and services.

You are entitled opinions, but not facts.

Re:More Statist Bullsiht (4, Insightful)

khallow (566160) | about a year ago | (#43470775)

You are entitled opinions, but not facts.

Not much I can add, except that maybe people who use the term, "Libertards" seem universally to be idiots. But that's just an entitled opinion of mine.

Re:More Statist Bullsiht (-1, Troll)

SomeKDEUser (1243392) | about a year ago | (#43470799)

I have yet to meet a libertarian that was not a greedy asshole (the pretend ones) or lived in a parallel universe (the true believers).

Re:More Statist Bullsiht (2)

khallow (566160) | about a year ago | (#43470819)

I have yet to meet a libertarian that was not a greedy asshole (the pretend ones) or lived in a parallel universe (the true believers).

I wouldn't expect you to recognize a situation where you had.

Re:More Statist Bullsiht (2)

mcgrew (92797) | about a year ago | (#43470705)

The great depression wasn't caused by the stock market crash, by the way.

Indeed. It was caused by the very same actions that caused the 2008 meltdown. There's an excellent history of the 1920s written shortly after the crash that was required reading in a class I took at SIU about 40 years ago, Only Yesterday. [virginia.edu] It's a good read, and an eye-opener about our own time.

After the crash, the unemployment rate was about what it is now - floating between 9 and 10 percent

I'd be very interested in a citation -- everything I've read (and my grandparents, who were born about the turn of the century) said it was more like 25-35%.

Notice below how you see the dow begin to recover up until Smoot-Hawly

That was enacted in 1930, [wikipedia.org] your graph shows no such thing. Read the book I linked, the full text is there.

Re:More Statist Bullsiht (1)

khallow (566160) | about a year ago | (#43470807)

I'd be very interested in a citation -- everything I've read (and my grandparents, who were born about the turn of the century) said it was more like 25-35%.

Not six months after the crash. Those high levels of unemployment came later [u-s-history.com] in 1932 and 1933.

Re:More Statist Bullsiht (5, Insightful)

Chrisq (894406) | about a year ago | (#43470415)

Attempting to justify more theft of the public and increased government spending.

It's simple to answer this question, do you want to incur debt or spend money that you have? Anyone who prefers debt is a fucking idiot and shouldn't be trusted.

Wow this brings stupidity to new levels. A report is widely used to justify government cut backs. The report proves to have mistakes in it that would have given a different result - so pointing out the error is "Statist Bullshit"? There would be some justification in arguing that the report does not matter, though for people who previously used it to argue their case this would be hypocritical. But to argue that we should continue to use the incorrect report because correcting it is statist is just dumb.

Re:More Statist Bullsiht (-1)

Anonymous Coward | about a year ago | (#43470555)

Stupid? Really? I see you cleverly avoided answering the question.

My point was that no report is necessary to make the correct conclusion, errors in Excell are not relevant, nor is the report.

Deficit spending is bad, debt is bad, big government statism is bad, unless you are one of the thieves of course.

And you present no argument otherwise, except for calling me stupid. Nice.

Fuck off.

Re:More Statist Bullsiht (2)

Chrisq (894406) | about a year ago | (#43470711)

Stupid? Really? I see you cleverly avoided answering the question.

My point was that no report is necessary to make the correct conclusion, errors in Excell are not relevant, nor is the report.

Deficit spending is bad, debt is bad, big government statism is bad, unless you are one of the thieves of course.

And you present no argument otherwise, except for calling me stupid. Nice.

Fuck off.

OK so you can know what's good and bad without regard to any facts. I'll let others decide whether that is stupid or clever.

Re:More Statist Bullsiht (0)

Anonymous Coward | about a year ago | (#43470689)

western governements have been spending more then their income for at least 40 years.

you don't need a study to know that can't last, sooner or later you have to pay what you spent

Re:More Statist Bullsiht (0)

Anonymous Coward | about a year ago | (#43470523)

Debt? Or Investment?

Nobody argues that student debt isn't an investment in earning more money in the future (that pays off the debt and more) unless you do a pointless degree. What about a mortgage compared to rent (in the UK, the mortgage is often cheaper per month than renting, and you get a house-shaped asset after 25 years)? Corporate start-up loans? A car loan to buy a car that you need to get to your new job?

The issue is that the money that you're using up front is used wisely, and that's a problem we can't solve because politicians.

Austerity hits the poor hardest - yet the poor are those who spend all the money they have out of necessity, and keep the economy turning over (recent studies for example suggest that 50% of Americans are living in poverty, or close to the poverty line). It now appears that the statistics behind the current drive for austerity around the world are mis-calculated. Not a shock for many of course. Austerity and unemployment are favourite policies for right wing politicians and businesses - unemployment keeps wages down, austerity keeps the proles down.

Re:More Statist Bullsiht (0)

Anonymous Coward | about a year ago | (#43470719)

"Nobody argues that student debt isn't an investment in earning more money in the future (that pays off the debt and more) unless you do a pointless degree."

I don't even understand that sentence, is that a question or a statement?

"What about a mortgage compared to rent"

Umm, what about it? That's not what I was talking about. So what's your point?

Re:More Statist Bullsiht (1)

Lakitu (136170) | about a year ago | (#43470791)

So you want the government to pay for billions (or trillions) of dollars worth of things by having that cash sitting around in an account all year long in preparation for the bill?

Debt spending is not the same thing as deficit spending. Keep on speaking your mind about it, though! People voicing opinions like yours, above, are reason the libertarian "movement" is so generally laughable.

In short (2)

oldhack (1037484) | about a year ago | (#43470359)

Economics. The social "science" with a pretension and envy of physics, practiced by those who couldn't cut it at math or physics.

Re:In short (1)

AlphaWolf_HK (692722) | about a year ago | (#43470567)

Not sure how you draw the conclusion that it has any desire to be physics.

If you want to associate economics with another form of science, then you'd probably best compare it to psychology. For example, something simple like supply and demand play directly into somebody's thought process about what something is worth.

Re:In short (0)

PopeRatzo (965947) | about a year ago | (#43470729)

If you want to associate economics with another form of science, then you'd probably best compare it to psychology.

Except psychology is more evidence-based.

Economics is as soft a science as exists, and it's made worse by the people involved. There's a level of confirmation bias that would be unacceptable to an astrologer.

Re:In short (3, Insightful)

mcgrew (92797) | about a year ago | (#43470623)

Wow, what a horrible moderation. Troll? Really? Looks like the idiots from 4chan have mod points today, or maybe a disgruntled MBA. You are entirely correct, I had an undergrad psychology prof say that there isn't a psychologist that there's another calling him a gold-studded liar, the same could be said for economists, who seem to ignore results. Example: Cut taxes on the rich for job creation, ignoring all of history. Even after the Bush cuts (among other mistakes) ruined the economy.

However, rather than being stupid, IMO economists are simply dishonest. Most people who worship money are.

Waste your points on me, 4channers, so you won't mod good comments like the parent's down. This is ridiculous. Please, slashdot, bring back the old metamoderstion (or give me a few ponts, haven't had any in ages).

It's not about debt (4, Insightful)

srussia (884021) | about a year ago | (#43470361)

It's about what you spend it on.

If you spend it on capital goods that allow you to produce more, that's investment.

If you spend it on final use goods, that's consumption

Simple concepts: consumption is not production and not all spending is investment. And yet, look at how Gross Domestic Product is calculated.

GDP = private consumption + gross investment + government spending + (exports - imports)

Re:It's not about debt (0)

Anonymous Coward | about a year ago | (#43470527)

you're posting in the wrong forum. this article is about excel, not debt. (yeah yeah yea... i know... 'i must be new here')

Re:It's not about debt (1)

explosivejared (1186049) | about a year ago | (#43470531)

That is a simple accounting identity, a way to avoid double counting. Income (output, GDP, whichever term you choose) is just the flow of value, and it would be stupid not to include how much value went toward consumption. An economy produces x amount of value in a given year, and those are simply how the value is divvyed up. Some production goes to satisfying consumer demand, and some is held back to build more productive capacity. You're just off base not conflating your own personal semantics for what "production" should mean with a simple technical accounting identity.

Re:It's not about debt (1)

SomeKDEUser (1243392) | about a year ago | (#43470701)

More than that: according to his logic, an "investment" should only count as such it is is successful. I'll leave it as an exercise to the reader to determine how you can possibly decide that, and when.

Note the legal disclaimer (2, Informative)

SmallFurryCreature (593017) | about a year ago | (#43470379)

In Holland at least, financial products must carry a legal disclaimer stating that past performance is no indication for the future.

What is this entire flawed study? Trying to predict the future, from past performance.

The Dutch economy is an open economy heavily dependent on the performance of the rest of the world. It doesn't much matter what our leaders do, the rest of the world dictates the state of the Dutch economy. So how do you compare its performance with the rest of world? It doesn't matter what our debt is, it matter how many products Germany ships through Rotterdam. But still, these economists try to compare how The Netherlands fared with X debt against the US which has a totally different economy. How different? The US is one of the bigger countries and is #1 in agri culture. The Netherlands is one of the smallest countries and is #2 in agri culture. Why? Every American black and white cow was created by a dutch boy sticking his arm up a cow. And jerking of a bull. The US exports low value agri cultural products, the Netherlands high value.

But it means the SAME industry, is COMPLETELY different. Baby cow production US style is cowboys and homo sexuality in the prairy. Dutch baby cow production is bestiality and high tech in the desolate north.

It is interesting to note that politicians who claim to want the best for big business are NEVER themselves successful big business owners AND that the successful big business owners never ever agree with them. Wallstreet likes the Republicans supposedly (but the two top financial newspapers advised voting against Romney because even a socialist in the white house would be better) but people like Warren Buffet and Richard Branson sing a very different tune. They think the best way to beat a recession is to spend. Not spend recklessly but invest in the future not in handing out tax cuts to buy votes.

Be wary of any leader who leads out of an ideology and not what is needed right now. Would you go to a doctor whose every answer is "lets amputate"? No? Then why vote for a politician whose every answer is "cut taxes, spend less, except on the pork project I need to get re-elected"? Real leadership is looking at what needs to be done and then do it. Not just have a one size fits all slogan.

Re:Note the legal disclaimer (5, Funny)

3.5 stripes (578410) | about a year ago | (#43470431)

" a dutch boy sticking his arm up a cow. And jerking of a bull."

The red light district has changed since I was last there..

Re:Note the legal disclaimer (0)

Anonymous Coward | about a year ago | (#43470553)

" a dutch boy sticking his arm up a cow. And jerking of a bull."

The red light district has changed since I was last there..

It is producing offsprings now apparently.

Re:Note the legal disclaimer (2)

Diddlbiker (1022703) | about a year ago | (#43470655)

The US is one of the bigger countries and is #1 in agri culture. The Netherlands is one of the smallest countries and is #2 in agri culture. Why? Every American black and white cow was created by a dutch boy sticking his arm up a cow. And jerking of a bull. The US exports low value agri cultural products, the Netherlands high value.

But it means the SAME industry, is COMPLETELY different. Baby cow production US style is cowboys and homo sexuality in the prairy. Dutch baby cow production is bestiality and high tech in the desolate north.

I think the high value of Dutch agricultural products has more to do with the gigantic high-yield flower industry than with jerking of cows. Go over the Dutch border and try to find Dutch cheese. Famous as it is, you will not find the entire dairy island stacked with Dutch cheese outside the Benelux. Visit any flower store in the world, and it's a different picture: you're likely to find a good amount of Dutch flowers. My ghetto neighborhood supermarket sells more packets with Dutch flower seeds than it sells Dutch cheese (most of that made in the US anyway; there's no "regional" protection like that in the EU)

Re:Note the legal disclaimer (1, Troll)

AlphaWolf_HK (692722) | about a year ago | (#43470675)

They think the best way to beat a recession is to spend.

This is mainly because they subscribe to Keynesian thought. The new deal was probably the greatest example of Keynesian theory being applied, and it didn't benefit anything. The war did because it displaced millions of otherwise non-working Americans overseas, which offset the supply of labor in a way that inadvertently triggered a recovery. Keynesian thought was later shattered when stagflation happened in the 80's, which under Keynesian theory is impossible, and demonstrated rather conclusively that government spending isn't the cure all.

Tax cuts don't buy votes, by the way. Most of the wealthy are wealthy to such an extent that taxes don't bother them that much. The ones who hide money in overseas accounts from legitimate income are the minority. The majority of those who hide money in overseas accounts are hiding money that they gained illegally, such as through the drug trade, securities fraud, etc. Rather, paying their taxes would land them in jail quickly when the IRS can't determine where their money came from. Notice the effort required to keep money in overseas banks - the act of doing so isn't cheap at all, and can easily land you in hot water. Why risk going to jail for a very long time over not paying the government what ultimately doesn't amount to anything you'd really miss anyways?

Personally I have a hard time thinking of many wealthy people who don't vote Democrat, mainly because they tend to benefit the most by doing so. They vote democrat because democrats like to pay them for "make work" projects as well as invest in businesses that don't actually have a viable business model. Take Fisker for example. Fisker couldn't land much at all in private investments for a good reason. Tesla on the other hand had their shit together, which is why they actually had plenty of venture capitalist funding. Mr. Fisker just got some free income while he effectively pretended to innovate. Yes, those 1% that many self identified progressives rail against are themselves primarily progressive:

http://legalinsurrection.com/2011/10/the-top-1-probably-voted-disproportionally-for-obama/ [legalinsurrection.com]

It's a strange set of circumstances that self identified conservatives claim to want to cut spending, but don't vote for anybody who will actually do so, whereas self identified liberals are against corporate welfare, but actively vote for those who hand out the most corporate welfare. Obama is probably one of the worst offenders of handing out corporate welfare.

Re:Note the legal disclaimer (0)

khallow (566160) | about a year ago | (#43470691)

The Dutch economy is an open economy heavily dependent on the performance of the rest of the world. It doesn't much matter what our leaders do, the rest of the world dictates the state of the Dutch economy.

Heavily dependent doesn't mean that is the only factor. Where's my free windmill and tulip farm? I'm dictating! The Netherlands produce things of value which the rest of the world has to buy. Debt load of the government effects the efficiency of that production.

It is interesting to note that politicians who claim to want the best for big business are NEVER themselves successful big business owners AND that the successful big business owners never ever agree with them. Wallstreet likes the Republicans supposedly (but the two top financial newspapers advised voting against Romney because even a socialist in the white house would be better) but people like Warren Buffet and Richard Branson sing a very different tune. They think the best way to beat a recession is to spend. Not spend recklessly but invest in the future not in handing out tax cuts to buy votes.

Apparently, neither of the top two US financial newspapers, the Wall Street Journal and the International Business Times give political endorsements. The Investor's Business Daily endorsed Romney.

I don't know about Richard Branson, but Warren Buffet has two strikes against him. He profits from a complex tax and regulatory environment such as what Obama brings. And second, his main means of legal tax avoidance, undeclared capital gains would remain untouched.

Romney was a successful big business owner contrary to your assertion that such things NEVER happen. Also I think you don't get at all the perverse incentives that exist at the big business level.

And Obama has worked out just fine for a number of big businesses such as the music and movies oligopolies, the companies needing bailouts, the insurance industry, or companies looking for easy money from the renewables programs. I think most of us realize that what is good for big business isn't necessarily good for anyone else especially when it comes to handouts from the federal government or regulatory protectionism.

Be wary of any leader who leads out of an ideology and not what is needed right now. Would you go to a doctor whose every answer is "lets amputate"? No? Then why vote for a politician whose every answer is "cut taxes, spend less, except on the pork project I need to get re-elected"? Real leadership is looking at what needs to be done and then do it. Not just have a one size fits all slogan.

As I see it, real leadership would be cut the debt load because that's what is needed.

Correlation is not causation. (2, Informative)

Anonymous Coward | about a year ago | (#43470387)

"""
Paul Ryan's Path to Prosperity budget states their study "found conclusive empirical evidence that [debt] exceeding 90 percent of the economy has a significant negative effect on economic growth."
"""

Nope. "has a[n] effect" is a claim of causation. In reality, all they found was a correlation. And by "reality", I of course mean "made up fantasy land where they can't use excel properly".

-- FatPhil (AC, as I'm away from home and don't remember my password)

True, but misleading. (0)

Anonymous Coward | about a year ago | (#43470403)

While the errors here are startling, it is clear this is being pushed for political ends, and not scientific ones.

There is an excessive willingness to take on debt in most of the developed world, because sovereign interest rates tend to be rather low, and it is politically profitable to do so.

The problem with governments taking on debt, is not based on the economics, its based on the politics. If you say 90% of GDP is OK, it will be politically profitable to never have a debt less than 90% of GDP, and to continually push higher until the public is again convinced that the debt is too high.

It may be economically valid to give certain kinds of tax giveaways to certain voting blocks right before an election in some cases.That doesn't mean you should stand for it. Governments who have chronic debts are run by the most cynical brand of politicians, unchecked by the voter.

Re:True, but misleading. (2)

SomeKDEUser (1243392) | about a year ago | (#43470735)

If you are paying interests below inflation, you should pile up debt, if possible long term, as much as you can. In fact, this is a clever way to cheaply roll over older, more expensive debt.

Also, in a semi-depressed economy, any kind of spending by the government, even on inane things, will turn out to help recovery, provided enough people get to dip in. Of course if you spend on unemployment benefits and on re-training of workers, you get much more immediate returns.

Attacks on austerity miss the point (0)

Anonymous Coward | about a year ago | (#43470425)

Hearing Krugman go on about this week after week is nauseating. Yes, recessions are the worst time for austerity. But the bastards never practice austerity in the good times. If the bad times are the only times when the public will support reigning in expenses, then so be it. The government is like a drunk teenager who is whining about their curfew over a cell phone while driving.

Re:Attacks on austerity miss the point (2)

SomeKDEUser (1243392) | about a year ago | (#43470751)

Yes, because we should be bitter about government not pretending to our misunderstanding of economics. And inflicting massive pain on tens of millions of people is OK. It is for a GOOD cause: decreasing the debt, which is ALWAYS BAD.

Rich economies are rich. One of the side effect of being rich is that you can pile on proportionately more debt. Which is completely fine, and in any case an infinitely better use of money than bullion in vaults.

About the authors: (5, Informative)

oduesp (1302043) | about a year ago | (#43470433)

Carmen Reinhart: (Chief Economist) Bear Stearns -> IMF -> Harvard
                                            \-> married with Vincent Reinhart: FED -> (Chief US Economist) Morgan Stanley.
                                                      famous quote: "Secretary Paulson Makes the Right Call" The Wall Street Journal, Sept. 16, 2008:
"In other words, some government aid might ultimately have to be directed toward financial firms whose failure would otherwise threaten the financial system.
The politicians now running for office should also appreciate that their grand ambitions for new spending programs or tax cuts may have to be tempered by the need to rescue financial firms."

Kenneth Rogoff: IMF -> Harvard

Austerity doesn't effect the highly educated... (0)

acidfast7 (551610) | about a year ago | (#43470447)

so I find it quite comfortable in Germany. In fact, I'll probably add another academic title quite soon. I just wish that my American passport would list the titles as it can cause some confusion when traveling (Passport and Credit Cards don't always match in the computer).

Re:Austerity doesn't effect the highly educated... (5, Funny)

cyber-vandal (148830) | about a year ago | (#43470491)

It's "affect" Mr Highly Educated.

Re:Austerity doesn't effect the highly educated... (1)

Anonymous Coward | about a year ago | (#43470569)

He never said he was an english major. Though I feel the bigger problem is his lack of a real line of reasoning. "Austerity doesn't affect me. i'm highly educated. therefore, austerity doesn't affect the highly educated." I'm sure there are a bunch of people who are highly educated that *are* affected by austerity. There is no reason to come to his conclusion based off of the assumptions given.

Re:Austerity doesn't effect the highly educated... (1)

Anonymous Coward | about a year ago | (#43470619)

Obligatory: http://xkcd.com/326/

Re:Austerity doesn't effect the highly educated... (0)

mjwalshe (1680392) | about a year ago | (#43470677)

Actually it is effect in this usage

Re:Austerity doesn't effect the highly educated... (0)

Anonymous Coward | about a year ago | (#43470789)

No, it's not.

Also... commas, motherfucker; learn how to use them. It's so not surprising that you have no idea of the difference between "affect" and "effect", since you can't even construct a 7-word phrase that's syntatically correct.

Re:Austerity doesn't effect the highly educated... (4, Insightful)

SomeKDEUser (1243392) | about a year ago | (#43470769)

You know that Germany has relatively low unemployment compared to the rest of Europe because many youth learn trades instead of being jobless? Same for Austria and Switzerland.

Austerity affects everyone. It kill opportunities, it stifles social mobility, it removes funds from research and long term investments. There are no good aspects to austerity, except that at the top you fall less than those at the bottom so you are comparatively better off. But to rejoice in that makes you a horrible person.

Dubious Proposition (3, Insightful)

explosivejared (1186049) | about a year ago | (#43470459)

Reinhart and Rogoff have certainly been warning of high debt levels, but it's wrong to give this study too much credit for what "austerity" there has been across Europe. Most cuts in places like Greece and Spain were fait accompli, once it was clear that the ECB was not going to budge on its inflation target to neither try and boost nominal growth nor to crudely relieve nominal debt levels.

I will grant that the 90% debt/gdp trigger is most likely non-existent, but the rest of their book does yeoman's work in cataloging financial crises. It's a useful antidote to the mass psychological amnesia that is perpetually recurring. "Our new investments our safe and returns will never fall" inevitably leads to "what perfidy caused this?" The cycle has been repeated in remarkably similar ways for nearly a millenium now. We should appreciate the detailed financial history they have created, and chide them for the dubious massaging of the data. Just don't overstate its political implications.

Re:Dubious Proposition (3, Informative)

SomeKDEUser (1243392) | about a year ago | (#43470783)

Crises which happened in a world without central banks are profoundly different than those after. In that what was ignorance and foolishness is now malign or incompetence.

If you read the re-analysis of RR, with the correct data, you see that there is nearly no correlation between debt level and growth. And indeed, crises happen randomly, and so do the rise and fall in debt level. sometimes they meet, but it turns out that most of the time it's just bad luck.

Should you pile on any amount of debt? probably not. But you also should not worry much about it.

When you're cooking the data ... (2)

dltaylor (7510) | about a year ago | (#43470485)

When you're cooking the data, try not to make too many obvious mistakes. Of course, had the original propaganda piece, I mean "study", been peer-reviewed by someone who "could do the math" (obviously NOT any economists), this would have been pointed out as total nonsense in the first place.

Straw man (0)

Anonymous Coward | about a year ago | (#43470511)

That's a straw man argument. It isn't an Excel error or a book that causes that problem. It's a book ABOUT the problem, not the causality of the problem.

Debt to GDP simply limits the money you can borrow, especially in scary economic times. To run a deficit, you have to either print the deficit by inflating the currency artificially or by selling bonds and borrowing the money.

Governments with deficits need to sell bonds, when nobody wants to buy, they end up paying a much bigger return (yield) on those bonds. That means money flows into the government that would otherwise be chasing the next big thing in industry. Industry can't pay enough to compete for that limited money supply * .

Growth as economists measure it, is the increase in the money supply (both originated by government busy work, and by industry commercial work). So if the government pulls back and cuts spending, then growth goes down, but it needs to happen for money to be freed up for industry. If Governments keep spending, then they create little government created pockets of industry that need constant government money flowing into them to keep them alive.

Governments want austerity, because the longer they run big deficits, the more money they draw from industry, the deeper they get into debt, and ultimately, it's just fake spending, creating industries that just depend on Govt handouts.

Basically, no pain no gain. In the long run, they have to cut their deficits, but in the short term it means pain because it makes the growth number go down. In that money supply number, fake government busy work, looks exactly the same as real work.

* To make matters more complicate, the Fed buys government bonds in order to force the yield down. It's a fake buyer in a mock auction. That practice is outlawed by Maastricht treaty, yet it is believed the Euro zone banks did the same with Greece. But hey, it lets them point to the bonds and pretend the market has trust in the currency because the bond yield is low, while ignoring the fact that their own central banks are forcing it low by printing money to buy the bonds.

Warren Buffet warned about the risk to the dollar:
http://www.cnbc.com/id/40233710

Re:Straw man (1)

Anonymous Coward | about a year ago | (#43470749)

The other argument, is that Governments should "spend" on capital projects in the bad times to help the economy, and then "save" in the good times whilst private "industry" promotes growth.

So far, "austerity" isn't working, one recent example, Ireland. GDP falling, causing cuts to Government spending, causing GDP to fall, causing cuts in government spending etc etc.

6 years later, they're still cutting and still falling, If it's not working, change the medicine, don't give them more of the same.

Confirmation Bias (4, Interesting)

MetricT (128876) | about a year ago | (#43470563)

http://en.wikipedia.org/wiki/Confirmation_bias [wikipedia.org]

The researchers got the result they wanted, so they didn't bother to check if they were actually correct.

And actually, that's being kind.

"fishy" (4, Insightful)

khallow (566160) | about a year ago | (#43470565)

These two numbers, 2.4 and -7.6 percent, are given equal weight in the final calculation, as they average the countries equally. Even though there are 19 times as many data points for the U.K."

Why should the UK be given more weight? There's only one such country, not 19 such countries. And the UK data in question is highly correlated (it all comes from the same debt over the same span of time, not 19 different points in the UK's history).

In addition, the rebuttal ignores two stretches of data:

RR examines three data samples: 20 advanced economies over 1946{2009; the same 20 economies over roughly 200 years; and 20 emerging market economies 1970{2009. We repli- cate the results only from the first sample as these are the most relevant to current U.S. and European policy debates, and they require the least splicing of data from multiple sources. We focus exclusively on their results regarding means because these have generated the most widespread attention. On their website, Reinhart and Rogo provide public access to coun- try historical data for public debt and GDP growth in spreadsheets with complete source documentation.3 However, the spreadsheets do not include guidance on the exact data series, years, and methods used in RR.

It's worth noting here that the rebuttal is willing to take data from the period just after the Second World War where a number of countries had high debt and were transitioning from a total war economy (that is, an economy totally focused on winning a particular war to exclusion of everything else, including economic growth) to a normal one - including the 19 year series of the UK mentioned above, and periods of excluded (excluded that is from the original study for unknown reasons) data from Australia, New Zealand, and Canada. All of these incidentally show high economic growth combined with high debt.

If we're excluding data series due to their irrelevance to current economies, why should these be counted? The US and Europe haven't been in a total war economy since the end of the Second World War. So it is to be expected that one would not see the economic gain (whether or not the debt is present) that one saw in the immediate post-war period.

The original research seems weak for a number of reasons, but I'm not willing to call it "fishy" on the basis of a rebuttal which makes its own "fishy" assumptions.

Re:"fishy" (1)

Anonymous Coward | about a year ago | (#43470615)

The UK has 15 times the population of New Zealand - that would be a good reason to increase its weighting in the calculation. Not that I disagree with your point.

Re:"fishy" (3, Informative)

squiggleslash (241428) | about a year ago | (#43470649)

Why should the UK be given more weight? There's only one such country, not 19 such countries

Read it again. The UK was growing at an average of 2.4% per year for twenty years. New Zealand's economy shrank 7.6% in one year only. Not only is the UK's figure relevant to a longer period of time, but actually it's more likely to be a figure related to the high debt level the authors of the study were concerned about, rather than a blip that could have been caused by an unrelated bubble.

At the very least, you should be comparing growth of (1.024^20 * 100 - 100) = ~60% to -7.6%, rather than 2.4% to -7.6%.

Re:"fishy" (1)

mjwalshe (1680392) | about a year ago | (#43470663)

and you probably ought to weight the figures relative to the size of the coutrys economy to stop outliers having a disproportionate effect

Re:"fishy" (1)

khallow (566160) | about a year ago | (#43470739)

and you probably ought to weight the figures relative to the size of the coutrys economy to stop outliers having a disproportionate effect

Unless, of course, the large economy is the outlier. Then you made the disproportionate effect worse.

Re:"fishy" (1)

khallow (566160) | about a year ago | (#43470731)

At the very least, you should be comparing growth of (1.024^20 * 100 - 100) = ~60% to -7.6%, rather than 2.4% to -7.6%.

Which is even more of an exaggeration than taking the same data point 19 times.

Re:"fishy" (0)

Anonymous Coward | about a year ago | (#43470667)

Well the -7.6 could just as easily be a statistical anomaly and so shouldn't be weighted equally. In fact, NZ is one of the countries where they inexplicable excluded postwar growth (i.e. 1946-1951) and only included the one(!) year (1951) which had the major lack of growth . The other issue is that R-R include all the postwar figures for some countries (e.g. the UK) which had low growth and high debts but excluded those (like NZ and Canada) that had moderate growth and high debts (except in the NZ case they included the one bad year). Your criticisms are totally off-base.

Re:"fishy" (1)

khallow (566160) | about a year ago | (#43470709)

In fact, NZ is one of the countries where they inexplicable excluded postwar growth

I don't know if the original research actually doesn't bother to explain this or not. But it's quite a reasonable thing to do since the the post-war growth comes from unusual circumstances that don't apply today. The UK was unusual in that its high debt from the Second World War extended well past 1950.

High debt is bad. (3, Insightful)

Karmashock (2415832) | about a year ago | (#43470585)

It means less flexibility.
More liability.
Less freedom.
More waste.

Say what you will about this study, the governments of the western world are living beyond their means.

The US government for example is spending about 50k per US household.

The median income of US households is about 49k.

That alone should tell you there is a problem.

To paraphrase Emperor Augustus: "things that can't go on forever - don't."

These governments are spending well beyond their means and the only way they can presume to maintain it even for a time is through massive inflation. Which will harm the economy, raise interest rates, and generally transition any country that chooses this path into a second world country.

And even this won't be enough because having destroyed your credit and dealing with increasingly higher interest rates it will only be a matter of time before you can't inflate the currency fast enough to paper over your debt.

And when that happens... anarchy... blood... social collapse.

People need to stop deluding themselves that they can magic the debt away as if it won't exist if you don't believe in it.

It isn't a six year old's imaginary monster. It's our civilization's very real debt. And it will bring us low if we don't bring it under control.

I also love that they're whining about these austarity measures when many of these countries are still increasing the amount of debt they owe. In many cases, they're simply slowing down... not reversing course.

If a country can at least tread water without building additional net debt then it's got the situation under control.

But many do not. The US does not. We spend more every year and the tax recipes and economic growth are not remotely keeping up.

I know I'm going to get hate mail for this... It's what comes of having an open forum.

But you can't wish the numbers away through denial. It's like arguing with the Sun.

Source of debt? (0)

Anonymous Coward | about a year ago | (#43470635)

Before trying to reduce public debts...
1. Where did it come from? Between tax cuts since the 80's for the richest and the bank bailout, that's a lot of money lost for the government
2. What is the money being used for? Is it to fund important investments or to compensate for those tax cuts?

Ah, MS EXCEL, the bane of my f**** existence (1, Funny)

radub (1188377) | about a year ago | (#43470645)

I didn't even bothered to read the submission, just posting this to tell everyone that after working 16 years with that piece of software, I need therapy

and this kids is why (2)

mjwalshe (1680392) | about a year ago | (#43470659)

Professionals don't use excel for data analysis
Load More Comments
Slashdot Login

Need an Account?

Forgot your password?

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>