Excel Errors, Debt, and Stimulus: Is Our Politicians Learning?

April 28, 2013

That’s the question we ask this week in honor of the commemoration of the George W. Bush Library. According to Politico the answer appears to be “yes.”

Politico tells us that the Democrats in Congress who argue that there is no urgency to deal with the debt and that instead the focus of policy should be boosting the economy and getting the unemployment rate down are now increasingly occupying the center stage in the Democratic Party:

“These Democrats and their intellectual allies once occupied the political fringes, pushed aside by more moderate members who supported both immediate spending cuts and long-term entitlement reforms along with higher taxes.

But aided by a pile of recent data suggesting the deficit is already shrinking significantly and current spending cuts are slowing the economy, more Democrats such as Virginia Sen. Tim Kaine and Maryland Rep. Chris Van Hollen are coming around to the point of view that fiscal austerity, in all its forms, is more the problem than the solution.”

The article then goes on to note the famous Reinhart & Rogoff spreadsheet error that was exposed by researchers at the University of Massachusetts, which destroyed the paper that provided the intellectual foundation for the debt crisis story. It’s still too early to reach any definitive judgment, but this can be one of those rare instances where new evidence actually changes policy. If so, it will be a big deal.
 

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