why the 'spread sheet scandal' should kill obama's social security cut [View all]

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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.