Debt Doesn't Cause Low Growth. Low Growth Causes Low Growth.

Our story so far: Carmen Reinhart and Ken Rogoff have been telling us for the past few years that high levels of government debt are bad for future growth. But is that true? There's certainly a correlation between debt and growth, but is there causation? Or is there some third factor that causes both high debt and low growth? There's already some evidence from UMass economist Arindrajit Dube that R&R get the causality backward: It's not that high debt causes low growth, but that low growth cause...