Excel Mistake Ruins Global Economies

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ducktape
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Excel Mistake Ruins Global Economies

#1

Post by ducktape »

We knew there was something fundamentally flawed in the Ryan vision of growth through austerity. Now, it appears, there's a more specific error:


An economics paper claiming that high levels of national debt led to low or negative economic growth could turn out to be deeply flawed as a result of, among other things, an incorrect formula in an Excel spreadsheet. The paper has been cited abundantly by the world's press politicians, including one-time vice president nominee Paul Ryan (R-WI).Two takeaways:


As such, the argument that high levels of debt should be avoided and the justification for austerity budgets substantially evaporates. Whether politicians actually used this paper to shape their beliefs or merely used its findings to give cover for their own pre-existing beliefs is hard to judge.





The paper's problems also highlight the value of peer review. Although the paper was included in the American Economic Review, it was included as a "Papers and Proceedings" article, taken from a conference and published without being reviewed.Much more (a good read and a great illustration) at the link ... [/break1]com/tech-policy/2013/04/microsoft-excel-the-ruiner-of-global-economies/]Ars Technica

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verbalobe
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Excel Mistake Ruins Global Economies

#2

Post by verbalobe »

I'm fascinated by this story. And I somewhat take issue with even Ars Technica's nuanced evaluation of the role played by "Excel" (far more nuanced in the text than in the headline and subhead: "... appears to contain an Excel error.")This is an out-and-out user error. From the lead-in, I half expected to find that an actual bug had been found in one of Excel's built-in formulae, or something like that. One can argue whether Excel's interface in some way, perhaps through poor usability factors, encourages errors. But this was a USER error, not a software error.Do people expect their programs to notice and correct for any bonehead slip-ups? That is not realistic. Appearing to blame this on Excel is a red herring.

A Legal Lohengrin
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Excel Mistake Ruins Global Economies

#3

Post by A Legal Lohengrin »

Sounds like a bunch of bullshit to me. Maybe the Excel mistake exists, but it has nothing to do with what right wing scum planned on doing and would have done anyway.The zombie-eyed granny-starver Paul Ryan would do whatever he is going to do regardless of facts or evidence.

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Sterngard Friegen
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Excel Mistake Ruins Global Economies

#4

Post by Sterngard Friegen »

It was only 8 or 9 years ago that Dick Cheney said that budget deficits didn't matter. They only started to matter when the bailouts began and the conservatives saw that many billions added up to trillions. Most of them had no idea our economy was that big (or how much the Wall Streeters were wolfing down). And then came the idiotic Tea Baggers who combined their naivete of economics with their idea that government had grown too large. (Of course, it always grows too large when Democrats are in power according to the Republicans. But the fact is government grew large because of Bush's policies and Congress' complaisance.)Thus beginneth the lesson.

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MN-Skeptic
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Excel Mistake Ruins Global Economies

#5

Post by MN-Skeptic »

This reminds me of a [/break1]blogspot.com/2011/03/national-proofreading-day.html]lawsuit against Lotus, the developer of 1-2-3:In the 1980s a Florida contractor filed a $254,000 product liability lawsuit against Lotus Development Corporation (remember the spreadsheet app, Lotus 1-2-3?). An employee in the construction company developed a Lotus spreadsheet to cost jobs. An additional row was inserted for general expenses; however, the formula didn't include the newly added expense of $254,000 in a $3 million office complex contract, which caused the contractor to underbid on that job. Even though the contractor won the bid, it lost money on the deal. Lotus said it wasn't responsible for the contractor's error. The contractor eventually withdrew the lawsuit.I remember that lawsuit and remember thinking back then that the contractor was an idiot. My opinion hasn't changed. Man up and take responsibility for your mistakes. Blaming the tool used only makes you look like an idiot.
MAGA - Morons Are Governing America

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Plutodog
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Excel Mistake Ruins Global Economies

#6

Post by Plutodog »

Best I can tell it was all a big snark about blaming MS Excel.
The only good Bundy is an Al Bundy.

Norbrook
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Excel Mistake Ruins Global Economies

#7

Post by Norbrook »

From reading it, while the headline makes it seem that there was an error in Excel - which, given the usual "Microsoft sucks!" readership there is understandable - the actual problem is that the authors were rather sloppy in not only their analysis of the data, they didn't check to see if they were using the correct formulas. One of the problems I've noted with some spreadsheet programs is that their "user friendly drag and click" can, if you're not paying attention, not select the correct fields.

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mmmirele
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Excel Mistake Ruins Global Economies

#8

Post by mmmirele »

It's not just the error in the Excel formula, but also a couple of very odd exclusions of countries/years which go against the authors' conclusions that running high deficits is bad juju. Anyway, the spreadsheet is compromised, but the question for me is why it took so long for this information to come out. And, as Lo points out, the granny-starvers in Congress (e.g., Ryan, etc.) just don't care. They would have found another way to justify their perfidy.

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TollandRCR
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Excel Mistake Ruins Global Economies

#9

Post by TollandRCR »

http://www.nbcnews.com/id/45755883/#51654111 demolishes the myth that governments cannot handle debt that exceeds more than 90% of income, although households certainly can.
“The truth is, we know so little about life, we don’t really know what the good news is and what the bad news is.” Kurt Vonnegut

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Dolly
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Excel Mistake Ruins Global Economies

#10

Post by Dolly »

Apr 24, 2013 The Economic Argument Is Over — And Paul Krugman Won For the past five years, a fierce war of words and policies has been fought in America and other economically challenged countries around the world.On one side were economists and politicians who wanted to increase government spending to offset weakness in the private sector. This "stimulus" spending, economists like Paul Krugman argued, would help reduce unemployment and prop up economic growth until the private sector healed itself and began to spend again.On the other side were economists and politicians who wanted to cut spending to reduce deficits and "restore confidence." Government stimulus, these folks argued, would only increase debt loads, which were already alarmingly high. If governments did not cut spending, countries would soon cross a deadly debt-to-GDP threshold, after which growth would be permanently impaired. The countries would also be beset by hyper-inflation, as bond investors suddenly freaked out and demanded higher interest rates. Once government spending was cut, this theory went, deficits would shrink and "confidence" would return.An academic paper that found that a ratio of 90%-debt-to-GDP was a threshold above which countries experienced slow or no economic growth was found to contain an arithmetic calculation error.Once the error was corrected, the "90% debt-to-GDP threshold" instantly disappeared. Higher government debt levels still correlated with slower economic growth, but the relationship was not nearly as pronounced. And there was no dangerous point-of-no-return that countries had to avoid exceeding at all costs. [/break1]yahoo.com/blogs/daily-ticker/economic-argument-over-paul-krugman-won-150247189.html]http://finance.yahoo.com/blogs/daily-ti ... 47189.html
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TollandRCR
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Excel Mistake Ruins Global Economies

#11

Post by TollandRCR »

Perhaps the most important error in this influential paper is the inexplicable: why did they leave out Australia, Austria, Belgium, Canada, and Denmark? It cannot have been because data were bad or missing. Perhaps the data were inconvenient?
“The truth is, we know so little about life, we don’t really know what the good news is and what the bad news is.” Kurt Vonnegut

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Sterngard Friegen
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Excel Mistake Ruins Global Economies

#12

Post by Sterngard Friegen »

Alphabetical discrimination?

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