I believe the lessons from Euorpe tend to vindicate Mr. Barro's article, not discredit it. Several economies, including Greece and Italy, were able to structure financial products that added more debt and spending than was officially shown in reports to the EU. These debts were the equivalent of 'off-balance sheet' borrowing for these nations.
This enabled Greece and others to add debt while still meeting their EU targets for budget deficits. This, in turn, increased the size of government and its ability to spend during the boom years with the unfortunate consequence of leaving these countries heavily indebted when the crisis of 2008 hit in full force.
Greece also had a higher tax on labor than many other European countries. Greeks tended to retire earlier than their European counterparts and pension expense was forecast to increase much faster than other nations.
Liberals tend to look at the significant drop in government spending and the simultaneous drop in GDP and blame the latter on the former, but the situation in Greece is more complicated than that. Cuts in government spending are part of the decrease in GDP, but the fall is much more complicated. The social fabric of Greece is being tested by its unsustainable debt boom and entitlement commitments.
There are a lot of delusions about government debt and deficits, including a popularly held delusion that the debt/GDP ratio is not extremely important.
We need only look at our own history and the experiences of other countries to prove that it is important. In the US, we experienced an excellent economy for the latter half of the 1990's following congressional bills passed to reform spending and balance budgets.
Conversely, in the US we have experienced an anemic recovery over the past 3 years despite record high levels of spending and deficits. Keynesian theory would dictate that our economy should have taken off given the level of deficit spending we've engaged in with 4 consecutive $1 trillion+ deficits, yet unemployment remains at historically high levels and real GDP growth is well below historical trends.
In other countries, the same story proves accurate. The Northern European countries fared very well, comparatively, during the most recent global slowdown when compared to countries that engaged in deficit spending and increased the debt/GDP.
Japan, in particular, has engaged in the largest scale buildup of debt over the past 20+ years. From 1980-1990, its debt/GDP ratio was relatively stable at about 70%. It experienced a recession in 1990 and began increasing its debt/GDP ratio in order to spend its way out of the crisis. Real GDP growth from 1980-1990 ranged from 3%-5% in Japan and since 1990-present GDP growth has ranged from 0%-2.5%.
Economists who write off a loss of 1% per year of GDP growth in order to justify higher debt/GDP ratios, typically because it favors their political priorities, forget the most powerful concept of finance and economics: compounding. One percent in any given year is not the end of the world (although it is about $160 B of GDP in the US, not a small amount by any standard), but compound that out over several years and you've missed out on quite a bit of economic growth.
Debt/GDP ratios do matter. The 1 year convention is what it is and if we used the 10 year convention, the issues would still be the same, it would just be the critical 10% threshold that was surpassed. It is sad to see an economist write off a metric of economic peformance as not a big deal. Perhaps he won't give out grades to his students this year because they aren't that important either.
This paragraph is a mischaracterization that takes the argument in an obtuse direction.
The ability to build one's own future was always at the core of the American experiment. Some left otherwise comfortable situations in Europe to go work long, hard hours just so they could own their own plot of land.
Ownership of property, especially real estate, is a driving incentive to forge a strong community. People who own nothing have little to lose when the social structure melts down and revolution ensues.
The Founding Fathers were mostly wealthy land-owners, whereas the leaders of the French Revolution were disgruntled members of the Third Estate. Thus, the American Revolution was about protecting rights from a foreign power and the French Revolution was about vindication against the ruling class.
Because many of the Founding Fathers were also self-made men, they understood the political and legal framework that was needed to defend that ability for all others in society. They loved these principles and put their lives on the line for them.
The French, by contrast, were poor and oppressed by a system that subjected all interests to the public, which took the form of the monarchy. They hated the ruling class and the forced subjection to the public interest and killed those in power in a brutal manner.
Republicans see that the America that Tocqueville saw is in danger from what has, to many, become as much a foreign power as the British of old: Washington DC. The Obama Administration has clearly pushed to subject the people's will to various things it believes to be in the public interest. The Republican rebuttle is that the public interest is better served by limiting government intervention and eliminating legislative coercion of the people.
The whole situation is unfortunate. I was pro-life before my first son was born and after he was born, it solidified my position on the issue indefinitely. When I think of how much I love my little one, it makes me sad that anyone would want to kill an unborn fetus.
Statistics are often used to mask the deeply personal and emotional aspects of the decision to abort a fetus. Perhaps all the energy and focus on giving women the right to choose to abort would be better focused on making women aware of other rights/possibilities, like the possibility of adoption.
I think the time, energy, and money would be better spent on other initiatives. We can create options for these mothers by supporting adoption and funding orphanages with the ability to support these children.
We can also work with local resources to educate sexually active young persons in developing nations about contraception.
These ideas sound difficult to implement, but so is an initiative to give women access to abortion in nations whose laws prohibit the practice. I believe we should not permit abortions except in cases when the mother's life is in danger or other extenuating circumstances. We have the ability to deliver these other options, why not try them first to see how successful they could be.
Funny that this article starts out by stating that we're making too much of supposedly trivial things and then forges ahead to make too much of a trivial thing.
Whatever the actual status of the bust of Churchill, Obama's act was symbolic in at least some measure. Churchill was defeated by Clement Attlee, who built the so-called cradle to grave welfare state in Great Britain, in the election of 1945 after WWII. Churchill led the opposition to this welfare state that ultimately failed. Obama aims to create a similar welfare state in the US and clearly the symbol of Churchill is inconsistent with that aim.