Atlas Shrugged: The Mocking

Thursday, July 7, 2011

Megan McArdle Is One Smart Cookie

The gift who keeps on giving:

Via Twitter:

Peter Suderman RT @7im: current and obligated cost of the wars in Iraq and Afghanistan? At least $3.2T, plus $1T in interest thru 2020
17 hours ago via TweetDeck Favorite Retweet Reply

Via Brad De Long:

Department of Awful Statistics: Why Ask Y? - Megan McArdle:

DougJBalloon 16 hours ago: I see you're revisiting the brilliance of your arguments for the Iraq War on twitter. Any interest in correcting some of the order of magnitude errors?

McMegan 15 hours ago: Do I have any interest further interest in debating whether the direct cost to the taxpayer is going to be $2 trillion? An argument that is going to devolve--since there is at this point vanishingly little possibility that it will grow to $2 trillion--into the other side trying to argue that things which aren't direct costs to the taxpayer are in fact direct costs to the taxpayer, or complaining that it's not fair to just look at direct costs to the taxpayer, or claiming that it's innumerate of me to compare stocks to stocks and flows to flows? Surprisingly, not really. But Merry Christmas!

DougJBalloon 15 hours ago: How about putting a strike through the 0.1% at least?

McMegan 15 hours ago: You're not factoring in growth. The correct equation is not 20 * $11tt, which is what my interlocutor--and I presume, you--are doing. That's not even right by some weird arguable metric; it's just wrong unless you presume that GDP is actually going to shrink farther and then stay there until 2023. I was using the CBO's standard growth rate of 3%, which I freely predict was in error for the past few years, because I didn't see this huge crash coming, but no way of knowing how big an error until 20203. However, not an order of magnitude as you claim. At the peak of spending, the cost of Iraq was maybe 1% of GDP, and spending has now fallen sharply; how could you think that it was going to be that high over a 20-year period, when we are supposed to have withdrawn for half of it?

DougJBalloon 15 hours ago: You wrote this in 2003. Let's estimate the 2003 GDP as 11 trillion, let's estimate 4 percent growth (that's on the high side but I am a very generous person). Then over 20 years, the total GDP would be 327 trillion dollars. That estimate is probably on the high side, by the way. You wrote "But it is not going to run us several trillion dollars (though even if it did, that would work out to less than 0.1% of GDP over the next 20 years.)" Let's take "several trillion". I would say that several means at least 3 and probably 4. I'm not talking about how much the actual Iraq War costs -- though that would be a pretty good estimate in fact -- I am talking about your use of the phrase "several trillion". If I take 3 trillion and divide by 327 trillion, I get slightly less than 1%. If I take 4 trillion (really the kindest interpretation of "several trillion" I can think of) and divide by 327 trillion, I get over 1%. You meant 1%, not 0.1%. Are you really so quantitatively inept that you cannot see this, even after I brought it up again? Are you really so nuts that you're going to bs me about rates of GDP growth and not just divide 3 by 300? God help us all.

McMegan 14 hours ago: Sigh. Okay, so we are now not discussing the actual cost of the war, but the hypothetical cost of the war as represented by the term "several trillion", which to me means any sum over $2 trillion, but YMMV. As I recall--it was, of course, eight years ago--I ran nominal figures out to 2023 with interest to account for the borrowing that we were doing. You could probably quibble with my methodology if I could remember it. It's certainly possible there was an error in my calculations, though it was a spreadsheet so not all that likely. Probably a lot easier to have had this conversation if you had raised the issue eight years ago, but at the time your coblogger was still egging on my less sane moments, IIRC. At any rate, if I have time tomorrow, I'll try to figure out what I did, and see if I still want to defend it.

DougJBalloon 12 hours ago: Hypothetical??? It was your hypothesis. You are utterly and completely insane. God have mercy on David Bradley's soul for what he has unleashed on an unsuspecting public. Bring on the apocalypse.

Heh. God, she's fun.


ifthethunderdontgetya™³²®© said...

And for the record, I will claim that the effect of the Iraq war on the price of oil should be counted as an enormous cost.

This put quite a few dollars in the hands of the fossil fuel industry, and took many times more from consumers and industries such as travel, auto manufacturing, etc.

Anonymous said...

but the oil...the oil will pay for iraq! it's a self-financing's genius!

Susan of Texas said...

And just think how grateful the Iraqis will be, to finally have control over their own oil.

Kathy said...

...the CBO's standard growth rate of 3%, which I freely predict was in error for the past few years ... because I didn't see this huge crash coming ... but no way of knowing how big an error until 20203

She may as well write: "Im a stupid doddy-head" a hundred times. Or maybe 20203 times?

Dragon-King Wangchuck said...

Or maybe 20203 times?

hee hee. c.f.

It's certainly possible there was an error in my calculations, though it was a spreadsheet so not all that likely.