In which Paul Krugman gets cutesy with causality

ICYMI, this week serious questions were raised about a controversial and influential paper by Harvard economists Carmen Reinhart and Kenneth Rogoff that purported to show -- or at least has been taken to show -- that when a country's national debt reaches about 90% of GDP, that debt acts as a significant drag on growth.  On April 15, Thomas Herndon, Michael Ash and Robert Polin published a paper alleging that Reinhart and Rogoff's paper contained, along with various methodological errors, a coding error in an Excel spread sheet. In response,  Reinhart and Rogoff acknowledge the error, but defend their methodology and  maintain that the error does not materially affect their conclusions. They also claim that they never stated categorically that higher debt caused lower growth. It's that question of how a politically freighted point is communicated and received that interests me here.

On his blog, Paul Krugman cried "casuistry" on that last point:

And the everyone hyping Reinhart-Rogoff very much included Reinhart and Rogoff themselves. Matt O’Brien has the goods. It’s true that their papers never said outright that the relationship was causal, but they weren’t anywhere near that scrupulous in op-eds and other media presentations. And the truth is that the papers may not have stated causation flatly, but it was clearly insinuated. By trying to claim now that they never meant to imply such a thing, R-R are falling down seriously in the menschhood test.

Today, Krugman, austerity's most stalwart enemy, devoted a whole column to the kerfuffle. And while I'm happy to see him hammer away at the foundations of the case for austerity, I must say that he replicates the alleged rhetorical error. That is, he gets cutesy with causality. The whole essay is set up to convey a conclusion that he somewhat airily dismisses in the final sentence.

The opening paragraph poses a pretty grandiose premise: 

Matt Miller's self-cancelling 'don't worry about the deficit now' argument

Matt Miller's argument that worries about the Federal deficit are overblown is self-cancelling.

The argument has two prongs. First, per his experience in the Clinton administration in 1993, he suggests that current deficit forecasts are often overblown.  A period of strong growth can change the picture fast. Second, Miller asserts that we more or less know what to do but lack the political courage.

The second point at least is incontrovertible.  Miller sketches out two key planks of likely deficit reduction: breaking Obama's pledge not to raise taxes on people making less than $250k per year and "trimming social security benefits for better-off retirees."  In other words, raise taxes and cut benefits.

But his argument that we should not worry now about the looming need to do just that makes no sense.  Blame Obama if you will for his no-new-taxes-under-$250k pledge. (I do: I have always thought that David Brooks' one valid fundamental criticism of Obama during the campaign was that this pledge would box him in.) Or defend it as a valid attempt to avoid the recurrent pattern of Republicans destroying our finances with tax cuts and Democrats getting killed at the polls for raising them -- as they did in 1994 -- by getting as much juice as possible out of taxing the wealthy.