I am not quite sure why, but apparently some people do take Niall Ferguson's pronouncements on economics seriously. I usually ignore his comments, since I can't imagine not having something better to do with my time. Nonetheless, I did note Paul Krugman and Brad DeLong beating up Ferguson for his failure to understand the Congressional Budget Office's projections for the long-term budget deficit.
But rather than having the decency to find some rock behind which to hide, Harvard Professor Niall Ferguson rose to the occasion and tried to rewrite what he had earlier said. In a new blog post he writes:
"Which is more important then:
1. The fact that, as far as the CBO knows today, the fiscal position in 2038 will almost certainly be worse, and maybe much worse, than it is now?
2. The fact that one of the CBO's projections is not quite as bad this year as it was last year, when it was abominable, as opposed to just terrible."
Well, there are all sorts or reasons why we should not be terribly worried about #1 (see my paper here for beginners), but for purposes at hand, #2 is exactly what Ferguson had argued in his original column where he highlighted the deterioration in the new CBO projections compared to the projections from 2012.
This one is not really debatable. Here's the key paragraph:
"A very striking feature of the latest CBO report is how much worse it is than last year's. A year ago, the CBO's extended baseline series for the federal debt in public hands projected a figure of 52% of GDP by 2038. That figure has very nearly doubled to 100%. A year ago the debt was supposed to glide down to zero by the 2070s. This year's long-run projection for 2076 is above 200%. In this devastating reassessment, a crucial role is played here by the more realistic growth assumptions used this year."
I was always taught that when you make a mistake the best thing is to own up to it and apologize. Apparently at Harvard and the WSJ the accepted practice is to deny the error and to criticize the people who corrected it.
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