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Basically, the economic research that everyone around the world decided to go all out on austerity wasn't actually conducted or reviewed properly.

It got called out by a grad student and basically they calculated averages badly as well as missing out 1/4 of the data set for analysis

http://www.bbc.co.uk/news/magazine-22223190

BBC News wrote:Reinhart, Rogoff... and Herndon: The student who caught out the profs

By Ruth Alexander
BBC News

This week, economists have been astonished to find that a famous academic paper often used to make the case for austerity cuts contains major errors. Another surprise is that the mistakes, by two eminent Harvard professors, were spotted by a student doing his homework.

Think the UK govt. will change it's tack now? I want to get this out...

If you consider your link a reputable source to argue about austerity, then you would agree that the following quote too... because it's from the very same article you linked.

Discovering a spreadsheet error was never going to end the debate over austerity - and nor should it, according to Megan McArdle, special correspondent for Newsweek and The Daily Beast.

"There is other research showing that you can have these slowdowns when you get to high levels of debt," she says. "We have a very vivid [example] in Greece."

This isn't an article about austerity, it's that data from a faulty spreadsheet was used to calculate a widely quoted scientific paper. It's more about the short comings of human error in science.

Genevieve wrote:This isn't an article about austerity, it's that data from a faulty spreadsheet was used to calculate a widely quoted scientific paper.

.. that was then quoted as a justification for austerity policies.

Austerity measures work faboulous for countries with massive export surpluses, like germany. On the other hand they are a death sentence for economies with rather strong domestic markets, like greece.

exfox wrote:

Genevieve wrote:This isn't an article about austerity, it's that data from a faulty spreadsheet was used to calculate a widely quoted scientific paper.

.. that was then quoted as a justification for austerity policies.

Test recordings said that it's been disproved that austerity works, based on that article and the results. Even though that same article states that it hasn't and there's still reputable data that supports it.

What if there were 4 cookies in a jar, but someone found that out using the wrong information? Would there then not be 4 cookies in the jar?

You think the Tories give a fuck? If people think they are wrong?...They'd argue that Black is White, then try and sell you the idea that Black is White, then get you to fund one of their party donors that sells Black as White because it's failing to sell Black as White.

Pedro Sánchez wrote:You think the Tories give a fuck? If people think they are wrong?...They'd argue that Black is White, then try and sell you the idea that Black is White, then get you to fund one of their party donors that sells Black as White because it's failing to sell Black as White.

same could be said for all the mainstream parties though

Mason wrote:

Pedro Sánchez wrote:You think the Tories give a fuck? If people think they are wrong?...They'd argue that Black is White, then try and sell you the idea that Black is White, then get you to fund one of their party donors that sells Black as White because it's failing to sell Black as White.

same could be said for all the mainstream parties though

It could, but at least Labour MPs know when to quit, when the feeling of the nation is against them (I'm not a diehard Labour supporter), LibDems I don't consider a party anymore, they're done unless Labour needs them as Lube to get in at the next GE, which seems unlikely given the state of things.

edit: But Blair was a cunt.

yeah lib dem are dead UKIP are gonna be the new third party imo

Genevieve wrote:What if there were 4 cookies in a jar, but someone found that out using the wrong information? Would there then not be 4 cookies in the jar?

Thats not accurate, its more like if there were 4 cookies in a jar and someone found that out using wrong information but there was actually 3, people would still go "Yeah but theres still cookies!"

Genevieve wrote:

exfox wrote:

Genevieve wrote:This isn't an article about austerity, it's that data from a faulty spreadsheet was used to calculate a widely quoted scientific paper.

.. that was then quoted as a justification for austerity policies.

Test recordings said that it's been disproved that austerity works, based on that article and the results. Even though that same article states that it hasn't and there's still reputable data that supports it.

lol no, links, as the vast bulk of modern economic journals have been vehemently against it for many years now.

I quoted it before and it's at the bottom of the same article that you guys are saying is proving your point, but here we go again.

Discovering a spreadsheet error was never going to end the debate over austerity - and nor should it, according to Megan McArdle, special correspondent for Newsweek and The Daily Beast.

"There is other research showing that you can have these slowdowns when you get to high levels of debt," she says. "We have a very vivid [example] in Greece."

So the article is a reputable source when half of it agrees with you, but it stops being one when the other half doesn't, or you just pretend the half doesn't exist?

The article never set out to make a statement on whether austerity is good or not. Just that one of the widely quoted researches was based off of faulty information. That's all in the text.

First part is about a specific academic paper.
Second part is just generic saying 'there is other research'.

Its not ignoring the 2nd half its simply acknowledging it doesn't really have much input into the argument of whether austerity works well or not. Errors in a major paper on austerity can be used against them, its good to have in an argument. Saying 'theres other research' isn't a very strong comeback.

Genevieve wrote:I quoted it before and it's at the bottom of the same article that you guys are saying is proving your point, but here we go again.

Discovering a spreadsheet error was never going to end the debate over austerity - and nor should it, according to Megan McArdle, special correspondent for Newsweek and The Daily Beast.

"There is other research showing that you can have these slowdowns when you get to high levels of debt," she says. "We have a very vivid [example] in Greece."

So the article is a reputable source when half of it agrees with you, but it stops being one when the other half doesn't, or you just pretend the half doesn't exist?

The article never set out to make a statement on whether austerity is good or not. Just that one of the widely quoted researches was based off of faulty information. That's all in the text.

The title contains the word "generally". The linked article, amongst others I read, said the trend set by the data does not indicate austerity is good when there's a high debt to GDP ratio. I just linked the BBC article because it was the 3rd or 4th one I'd read on the topic and is actually the first time the BBC have aired open opposition to the austerity program in the UK.

The premise of the original research was that high debt to GDP causes economic slowdown and even recession. The correction to the research found this wasn't actually the case and there's still enough room for growth. There are exceptions, such as Greece; I think this indicates that it's not all to do with public debt and GDP ratios. Greece was the first country to publicly capsize and subsequently was made an example of to hold the EU to ransom, basically an easy target to exact more damage.

How austerity got mixed in there is largely due to each political party's ideology; America went on a stimulus spend which raised growth, the UK went for austerity and is basically in a depression. I was meaning to generate debate on whether the UK government will admit it was wrong (unlikely) or do something different (unlikely, but less unlikely). They'll be gone in the next election anyway, I just want to seal their fate by making sure everyone knows their premise wasn't right in the first place...

EDIT: changed the title for clarification

None of this matters really, it's not as though economics is a hard science with rigid rules for predicting how things will happen. It's all too often forgotten that it is complex system that is made all the more unpredictable by the constant flux of random human factors. Politicians need to stop taking economic predictions as anything but guidance, and potentially very flawed guidance at that.

nobody understands the economy and they should just give the fuck up trying to anyway.
At the very best it becomes predictive guesswork. At the very worst it becomes a force that instils fear and removes confidence from the market, ironically damaging the very thing it is meant to aid.

Imo. Ofc.

Yes, but dickhead politicians like George Osbourne like to make out it is as an excuse to make people suffer for the good of himself and his friends...

If you want something funny to read about the unpredictability of economics, go read the Economist's report of predictions between something like a group each of business leaders, economists and binmen. They all get it wrong, but the binmen are the closest, followed by business leaders, then the economists

hugh wrote:At the very best it becomes predictive guesswork.

Not really, economics can estimate things very accurately. Its just extremely complex in terms of global economies. It's like comparing the understanding to why an apple fell on Newtons head to understanding the way the whole universe works. Just because the latter is a lot of guesswork doesn't mean the previous is a load of guesswork too.

hugh wrote:At the very worst it becomes a force that instils fear and removes confidence from the market, ironically damaging the very thing it is meant to aid.

When you add politics yeah.

To be fair, economics has managed to make a few people in the world very, very rich, and a lot of people very poor, so it has some uses, at least.

Austerity is bad because people's real standard of living has stagnated since the 1970s (when heavy bank deregulation began), wealth and income inequality are at record highs, and major corporations don't pay any tax.

The people who have been making profit from the repeated financial crises should bear the burden of austerity, not ordinary people who had nothing to do with the scam that is our monetary/financial system.