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The Less Than Prophetic Martin Feldstein

Sunday, 18 September 2011 13:40

The Washington Post business section ran a piece today titled, "a fiscal prophet shapes debt debate." The prophet being referred to in the headline is Harvard economics professor Martin Feldstein, who served at one time as President Reagan's chief economist.

Some of us know Mr. Feldstein for some less than prophetic work. For example, in the spring of 1993, when Congress was debating the Clinton tax increase, he wrote a column in the Wall Street Journal that claimed the Clinton tax increases will raise little, if any, revenue. His argument was that the disincentive of the higher tax rates would more than offset the impact of the higher rates themselves.

Feldstein also gained notoriety early in his career for publishing an article that purported to show the Social Security reduced private savings. It turned out that his results were driven by a computer programming error. When the error was corrected his results were statistically insignificant.

He updated this study in 1995 and claimed that with the additional years of data, his original results were now shown to be correct. However, it turned out that once the Commerce Department revised the savings data, his results were again insignificant.

Comments (4)Add Comment
Don't forget AIG
written by Pablo , September 18, 2011 3:47
Dean, don't forget his prophetic job as a member of AIG board, Mr. Martin "I don't have any remorse" Feldstein.
Are There Any Republicans Who Don't Hate Social Security?
written by Paul, September 18, 2011 6:57
After 75 years of success, wouldn't Rational Expectations Theory predict that there must be some Republicans who could say something rational about SS? But apparently even RET Harvard professors like Feldstein can't bring themselves to admit that it has merit.

How is it possible in a rational world that both Harvard and Chicago are regarded as top 10 universities when their Economics Departments are populated by Luddites?
Feldstein Advocates UnVooDoo to Hide VooDoo Economics
written by izzatzo, September 18, 2011 7:22
His argument was that the disincentive of the higher tax rates would more than offset the impact of the higher rates themselves.

Any economist recognizes this as the antonym of VooDoo Economics, known as UnVooDoo since it reverts to the usual VooDoo DooDoo for tax decreases claimed to pay for themselves.

Stupid liberals.
written by Brett, September 21, 2011 6:31
I didn't know about any of these. I just know Feldstein is an economic illiterate from Inside Job.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.