It's been a very bad week for the austerity movement.

Austerity has been discredited as a path to economic prosperity for awhile.

But a real breakthrough came last week, when a paper written by a graduate student (UMass Amherst's Thomas Herndon) debunked the famous Reinhart & Rogoff study, which had claimed that growth slows precipitously when a country's debt rises above 90% of GDP.

Since then, more dominos have tumbled.

In Europe, we've seen a backlash against austerity from various names, whether it's the International Monetary Fund criticizing the U.K. fund manager Bill Gross doing the same, or European Commission President Jose Manuel Barroso talking about the limits to austerity.

And now all of this has broken through to the mainstream with last night's Colbert Report, where that grad student, Thomas Herndon, was the guest.

Colbert had two segments devoted to making the austerians look like total laughingstocks.

One was the actual interview with Herndon. The other came as part of a news comment, where he mocked Paul Ryan and "Rogaine and Braveheart," along with several other mean nicknames.

It was one of those cultural moments. Suddenly one side just looks like fools in the national media.

Incidentally, this is exactly what Paul Krugman predicted last week would be the significance of Herndon's paper:

The point is that the next time Olli Rehn, or George Osborne, or Paul Ryan declares, sententiously, that we must have austerity because serious economists (i.e., not Krugman and friends) tell us that debt is a terrible thing, people in the audience will snicker — which they should have been doing all along, but now it has become socially acceptable.

Below are the two clips, the first being the interview with Herndon, and the second is the broader discussion of how influential Reinhart and Rogoff were on politics.



