Paul Krugman, again:
Economics and Politics: I’ve done a quick and dirty mini-RR for the period 1950-2007 (starting 1950 because that’s where the Total Economy Database starts), focusing only on the G7… there does seem to be an association between high debt and slow growth… most of the apparent relationship is coming from Italy and Japan; Britain didn’t seem to suffer much from its high debt in the 1950s. And it’s quite clear from the history that both Italy and (especially) Japan ran up high debts as a consequence of their growth slowdowns, not the other way around.
So this is really disappointing; they’re basically evading the critique. And that’s a terrible thing when so much is at stake.