It's official. The questionable study that was used to justify draconian austerity measures in several nations (including our own) and repeatedly cited as gospel by fiscal hawks like Simpson and Bowles has been debunked. The shoddy Reinhart and Rogoff study was exposed by 28 year old grad student Thomas Herndon, who found that the authors had made a coding error in their Excel spreadsheet that they didn't bother to correct. Correcting this error changed the results entirely, in a way that does NOT support the original specious claim that austerity is good for the economy.
But that did not stop Simpson and Bowles from continuing to promote ruthless austerity policies. How ruthless you ask? Well, there's a reason their commission was nicknamed the Catfood Commission, since that is what the most vulnerable Americans would end up having to eat if such policies come to fruition. This time around, they are focusing even less on new revenues and more still on spending cuts, including raising the eligibility age for Medicare. Note also how even in their first two plans they conspicuously took off the table the option of raising the top marginal tax rate even by a little. Basically, everyone's ox gets gored except the ultra-rich of course. Because apparently growth for the sake of growth is good no matter what the cost (not), and the Simpson-Bowles plan promotes growth (not).
The TSAP plan does indeed call for spending cuts along with new revenues, but we are careful to distinguish between wasteful and useful spending, and we are well aware that cutting too much too soon will seriously hurt the still-too-weak economy (as we have noted about the sequester). We are also aware that raising taxes on the rich (even by a lot) will not significantly hurt the economy, while raising taxes on the bottom 90% (even by a little) can and will hurt the economy if it is done while the economy is still weak. And we recognize that the jobs deficit is a much more urgent problem than the budget deficit, though both problems eventually need to be solved.
We must remember that the draconian, sequester-on-steroids cuts that Simpson and Bowles are calling for will inevitably lead to a massive number of workers losing their jobs, period. So before we even think about going down that road, let's start by firing the now-discredited Simpson and Bowles before their policies send the rest of us packing.
UPDATE: Looks like Europe is finally starting to abandon austerity, now that the damage it has done is crystal clear. Also, in the USA the February jobs number was higher than originally thought, implying that it is actually the sequester, not the tax hikes that began in January, that is hurting us right now. Congress really needs to answer the "clue phone," as it is ringing louder than ever.