Tea Party Intellectuals

Tea Party protesters seem to reference Ron Paul, Adam Smith, Ayn Rand, and other small-government figureheads as the intellectual founders of their young movement (or at least this is my experience covering tea parties in DC). But maybe they should be citing Kenneth Rogoff of Harvard and Carmen Reinhart of U. Maryland instead. Reinhart and Rogoff have produced a study examining the effects high public debt levels have on the economy. (This study adds to their recent book.) They find that public debt above 90 percent of GDP dampens growth, which would seem to corroborate the tea partiers' most basic complaints, that being that the government is incurring too much debt. From their abstract: "...the relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more." The real bottom line: bailouts are expensive, and the folks rallying in tea parties just may have a better realization of that fact than Congress does...read more