Reinhart and Rogoff seem to be correct in one basic respect: Economic growth does seem to be lower in very-high-debt countries. But the entire debate over their paper's flaws begs the central question of cause and effect. Is growth lower because of the high debt? Or does cause-and-effect the other way around?
Fear of debt is woven deeply into our culture. We associate debt with profligate spending, waste, gambling and overall sinfulness. As we learned during the housing bubble, it's easy to get in over our heads. So naturally we assume that the same must be true for our country -- government debt must be bad. But is it?