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xchrom

(108,903 posts)
Sun Apr 21, 2013, 11:39 AM Apr 2013

why the 'spread sheet scandal' should kill obama's social security cut

http://www.nationofchange.org/why-spreadsheet-scandal-should-kill-obama-s-social-security-cut-1366553100

***SNIP

The Scandal

But they were wrong. Thomas Herndon, Michael Ash, and Robert Pollin analyzed their original Excel spreadsheet and discovered a simple and significant calculation error. When it was corrected, the 90 percent number became meaningless. Not just misinterpreted, as many people felt Reinhart and Rogoff had done at the time, but meaningless.

Paul Krugman – my “hero” – has a good writeup on this. Mike Konczal has an excellent overview. There’s more, including what appears to be some cherry-picking of information to support their thesis, but the bottom line is: The 90 percent red-line means nothing. Nothing happens when it’s crossed.

For the anti-government austerity crowd, however, the 2010 Reinhart/Rogoff paper was the right argument at the right time. They ignored economists like Josh Bivens, John Irons, and Dean Baker, who expressed doubts.

The new findings by Herndon, Ash, and Pollin are a very important story. I followed it with great interest, but didn’t think I had anything to add to it.
27 replies = new reply since forum marked as read
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why the 'spread sheet scandal' should kill obama's social security cut (Original Post) xchrom Apr 2013 OP
Never should have been alive to begin with. yourout Apr 2013 #1
Hadn't Thought About it in Relationship to SS On the Road Apr 2013 #2
Right - take it further FogerRox Apr 2013 #16
Japan Tried Something Similar in the 90s On the Road Apr 2013 #22
Japan then and the US now, very different FogerRox Apr 2013 #27
Recommend. Triana Apr 2013 #3
it won't, he's totally invested in the charade... KG Apr 2013 #4
Exactly. AnotherMcIntosh Apr 2013 #6
As a side note to this, a recent study found that 88% of spreadsheets have errors: TheManInTheMac Apr 2013 #5
Unfortunately, they likely came up with that 88% figure on a spreadsheet (n/t) thesquanderer Apr 2013 #7
I was thinking that too, along with "78% of statistics are made up." TheManInTheMac Apr 2013 #8
Wow! Who knew? avaistheone1 Apr 2013 #9
Interesting piece, but it understates the badness of the Harvard conclusions caraher Apr 2013 #13
Mine don't underpants Apr 2013 #15
Think again. . . . h2ebits Apr 2013 #10
I have been pointing out for a long time that Timothy Geithner was a stealth JDPriestly Apr 2013 #11
I don't think Obama was deceived at all. Lasher Apr 2013 #17
I did not say that Obama was deceived, did I? JDPriestly Apr 2013 #24
I didn't realize Geithner was a protege of Pete Peterson. avaistheone1 Apr 2013 #19
Did you read the article at Nation of Change? JDPriestly Apr 2013 #23
"I first learned of the Administration’s plans to cut Social Security in a deep-background briefing" DJ13 Apr 2013 #12
A Famous Cyborg allinthegame Apr 2013 #14
K&R abelenkpe Apr 2013 #18
So what does that do to this chart? Lasher Apr 2013 #20
Sane minds and people over 62 will KILL Obama's offer to Rethugs Dan Ken Apr 2013 #21
Obama would just come up with some other phony justification to cut it. forestpath Apr 2013 #25
Great piece we should all read but I think Eskow is being a little too charitable. pa28 Apr 2013 #26

On the Road

(20,783 posts)
2. Hadn't Thought About it in Relationship to SS
Sun Apr 21, 2013, 11:47 AM
Apr 2013

but it certainly applies. The US may be living with debt of over 90% of GDP for a while. The difference between 0.9% growth and 2.2% if enormous in terms of long-term SS funding.

FogerRox

(13,211 posts)
16. Right - take it further
Sun Apr 21, 2013, 02:37 PM
Apr 2013

Increasing the debt to pay for infrastructure spending at the traditional levels of the New Deal, 5% to 6% of GDP, would create about 23 million jobs, at $31,500 each....thats 89.2 billion bucks or .6% of GDP, the CBP scored shortfall over 75 years was .6% of GDP, that insures SS is good thru 2090.

Yeah destroying the economy destroys SS.

On the Road

(20,783 posts)
22. Japan Tried Something Similar in the 90s
Sun Apr 21, 2013, 03:57 PM
Apr 2013

with public works projects, and if it did not pull them out of the recession. Instead, it led to increased public debt without raising the economy out of recession.

It really depends on how much spending and what it is used for. In the long run, projects not useful in their own right are not going to be benefical ways to spend money.

The right amount of spending is an economic call. Krugman originally suggested 2-3 thmes the amount of the actual stimulus. Seems about right given the economic growth since 2009. Even though the recovery has been very anemic, it's been underway for several years and it probably won't take as big a stimulus to get a robust recovery underway.

FogerRox

(13,211 posts)
27. Japan then and the US now, very different
Mon Apr 22, 2013, 12:56 PM
Apr 2013

Japan had been spending proper levels on infrastructure, we have been spending 1-1.5% of GDP. Should be 5-6%.

Did Japan have 17-14% U6 unemployment?

Was Japan facing a liquidity trap as Krugman mentions......

And U R right Japan built some useless projects.

Vastly different situations.

 

Triana

(22,666 posts)
3. Recommend.
Sun Apr 21, 2013, 11:53 AM
Apr 2013

A LOT of things should kill Obama's SS cut even without the scandal. The scandal is yet another reason it ought to die.

 

AnotherMcIntosh

(11,064 posts)
6. Exactly.
Reply to KG (Reply #4)
Sun Apr 21, 2013, 12:33 PM
Apr 2013

It's his agenda. Cutting Social Security doesn't even have anything to do with the deficit. Facts don't matter.

caraher

(6,276 posts)
13. Interesting piece, but it understates the badness of the Harvard conclusions
Sun Apr 21, 2013, 02:08 PM
Apr 2013
By failing to include certain spreadsheet cells in its calculations, the study by Harvard economists Carmen Reinhart and Kenneth Rogoff may have overstated the impact that debt burdens have on a nation’s economic growth.


Worse - it claimed an impact where none exists, which is very different from merely overestimating a real effect.

Panko's paper is interesting... it looks like the best way to reduce spreadsheet errors is by having lots of people look at a given spreadsheet. Which is what ultimately uncovered the error in R&R.

Of course, Dean Baker chided them as unprofessional in 2010 when they're paper came out for not being transparent with their data. I'll never know for certain, but I wouldn't be shocked if that were by design. And (he says in tinfoil hat mode) maybe they only released it to a lowly grad student because they didn't think he'd find out the problem...

But I don't really believe that; more likely R&R feel prey to the biggest hazard of research, fooling yourself. When a result contradicts your expectations the instinct is to dig deeper, but when it confirms them there's a strong tendency to just accept them uncritically. It's the stuff that bolsters their own beliefs that truth-seekers need to place under the most careful scrutiny!

h2ebits

(632 posts)
10. Think again. . . .
Sun Apr 21, 2013, 01:03 PM
Apr 2013

what you have to add to this story is to keep it alive and well.

It's important to the United States that this story gets continual press coverage until the people in the United States start shouting it from the rooftops.

JDPriestly

(57,936 posts)
11. I have been pointing out for a long time that Timothy Geithner was a stealth
Sun Apr 21, 2013, 01:56 PM
Apr 2013

anti-Social Security protege of Pete Peterson.

I would like to know who recommended Timothy Geithner to Obama?

Were they always friends?

How in the world did a conservative like Timothy Geithner, a protege of Pete Peterson, leading foe of Social Security, ever get on Obama's cabinet in the first place?

That is what I want to know. Because how that happened might help us learn something about the nefarious paths of influence and corruption that are bringing our country down.

Lasher

(27,502 posts)
17. I don't think Obama was deceived at all.
Sun Apr 21, 2013, 02:37 PM
Apr 2013

I think Geithner is just the kind of person Obama wants on his team.

JDPriestly

(57,936 posts)
24. I did not say that Obama was deceived, did I?
Sun Apr 21, 2013, 05:15 PM
Apr 2013

But Geithner is so unsuited for the job of Sec. of the Treasury that it is hard for me to understand how Obama could have appointed him to that post.

 

avaistheone1

(14,626 posts)
19. I didn't realize Geithner was a protege of Pete Peterson.
Sun Apr 21, 2013, 02:57 PM
Apr 2013

Nor did I realize Geithner was anti-Social Security. How does Geithner figure into the current attack on Social Security?

JDPriestly

(57,936 posts)
23. Did you read the article at Nation of Change?
Sun Apr 21, 2013, 05:14 PM
Apr 2013

TImothy Geithner was the source for a lot of the information that led to the campaign against Social Security. The author of that article explains that.

Pete Peterson headed a committee that picked Geithner for the NY Fed.

That is why I say that Geithner was a Peterson protege.

I have posted the links to articles about Geithner, Peterson and the appointment to the Fed so many times that I am sick of it. I Googled it. That is how I found out. It may still be possible to Google it.

DJ13

(23,671 posts)
12. "I first learned of the Administration’s plans to cut Social Security in a deep-background briefing"
Sun Apr 21, 2013, 01:57 PM
Apr 2013

"which a “Senior Administration Official” held for a small group of writers in August of 2010."


I think that disproves the belief by the Obama fan club that his chained cpi proposal is just a recent ploy to draw out Republicans into a grand bargain.

 

Dan Ken

(149 posts)
21. Sane minds and people over 62 will KILL Obama's offer to Rethugs
Sun Apr 21, 2013, 03:44 PM
Apr 2013

This was a "false challenge"..........Obama just did this to make Republicans look bad.

Mission Accomplished.

No one will deny Americans their retirement Social Security and medical care. No one alive today is against that.

Only Republithugs offer that as a solution to America's failed economy, a failed economy lying right at the foot of Rethuglican's bold moves under Clinton and Bush and their avoidance of responsibility for those failiures under Obama.

pa28

(6,145 posts)
26. Great piece we should all read but I think Eskow is being a little too charitable.
Sun Apr 21, 2013, 10:36 PM
Apr 2013

He hopes the administration will drop Social Security cuts because their decision was based on false data. However, the reason they won't is revealed right up front in his own article.

"I asked why they wanted these cuts. Because the international markets want them, was the reply. But the international bond markets love US government debt right now, I said."


Bond markets are the "smart money" and they bake debt growth into the cake. Clearly Geithner was not talking about what "international markets" wanted. He was talking about what somebody else wanted and Eskow knew that. Who was that "somebody else"?

Another clue he mentions himself is an older piece titled "147 people" that describes the cloistered thinking among banker technocrats and decision makers that are also commonly recognized as "the very serious people". We're talking about monumental egos and vast piles of cash at stake and they are not going to change their world view because Reinhart/Rogoff was proved bogus.

http://blog.ourfuture.org/20130325/147-people

There is a whole industry now willing and able to fabricate a brand new case backing up the same concept of keeping taxes historically low at the top and pay for it by defaulting on promises to future Social Security recipients.

So, going back to my first point. The Reinhart/Rogoff paper was not an accident or an error. The central of point is supported by the errors. No tin foil hats required.

Herndon, Ash and Pollin are heroes. They beat back the flawed conventional wisdom as well as the cynical bad guys by scrutinizing the data and calling out the lies. Nobody can fight the Pete Peterson's or the David Koch's with money. You have to out-think them and be vigilant and that's exactly what happened here.

Whatever you do just don't think this is over because they are going to keep on coming.





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