Reinhart and Rogoff argue that advanced countries will not be able to return to more sustainable levels of debt through austerity and growth. (We're stuffed?)

Link to The Guardian

"For Carmen Reinhart and Ken Rogoff, 2013 has been a year to forget. The big news in the world of academic economics was that a celebrated and hugely influential paper by the Harvard duo, on the link between government debt and growth, was wrong.

"The paper, cited regularly by supporters of austerity programmes, said countries where the national debt was higher than 90% of national output (GDP) could expect to see a marked drop off in growth.

"On examination, the data used by Reinhart and Rogoff showed there was no such link, with the pair's (many) critics saying that the line of causality lies in the opposite direction: low growth leads to high levels of debt rather than high debt leading to low growth."