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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forumswhy 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. Theres 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 its 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 didnt think I had anything to add to it.
yourout
(7,521 posts)On the Road
(20,783 posts)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)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)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)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)A LOT of things should kill Obama's SS cut even without the scandal. The scandal is yet another reason it ought to die.
KG
(28,749 posts)AnotherMcIntosh
(11,064 posts)It's his agenda. Cutting Social Security doesn't even have anything to do with the deficit. Facts don't matter.
TheManInTheMac
(985 posts)thesquanderer
(11,955 posts)TheManInTheMac
(985 posts)avaistheone1
(14,626 posts)The masters of the universe get it wrong again.
Thanks for posting this.
caraher
(6,276 posts)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!
underpants
(182,283 posts)I checked it with another spreadsheet
h2ebits
(632 posts)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)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)I think Geithner is just the kind of person Obama wants on his team.
JDPriestly
(57,936 posts)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)Nor did I realize Geithner was anti-Social Security. How does Geithner figure into the current attack on Social Security?
JDPriestly
(57,936 posts)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)"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.
allinthegame
(132 posts)once said....Deficits Don't Matter....so....I see no need for CPI.
Lasher
(27,502 posts)Dan Ken
(149 posts)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.
forestpath
(3,102 posts)pa28
(6,145 posts)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.
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.