08/20/2012 09:46 am ET Updated Aug 20, 2012

Paul Krugman To Newsweek: Correct Niall Ferguson's Barack Obama Story (UPDATE: Ferguson Replies, Is Promptly Condemned)

The latest issue of Newsweek is drawing some heavy fire from Paul Krugman.

The magazine has regularly been attracting more attention for what's on the outside of its pages — namely, its controversy-grabbing covers. But it was an article by fellow academic/pundit Niall Ferguson, not the cover it came in, that provoked Krugman's wrath. (That cover, though, did make the top of the Drudge Report.)

The article, "Hit the Road, Barack," lays out Ferguson's reasons for wanting Mitt Romney to win the presidency. In a blog post titled "Unethical Commentary, Newsweek Edition," Krugman charged Ferguson with getting several things wrong, but he highlighted what he said was a disingenuous and false section of the piece.

From Ferguson:

The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.

From Krugman:

Readers are no doubt meant to interpret this as saying that CBO found that the Act will increase the deficit. But anyone who actually read, or even skimmed, the CBO report (pdf) knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for.

The columnist said that Newsweek was "letting itself be used to misinform readers" and demanded a correction.

In a post on Monday, Ferguson declined to give one. He said Krugman had raised a "feeble" and easily rebutted objection:

I very deliberately said “the insurance coverage provisions of the ACA,” not “the ACA.” There is a big difference. Krugman suggests that I haven't read the CBO's March 2010 report. Sorry, I have, and here is what it says:

“The provisions related to health insurance coverage—which affect both outlays and revenues—were projected to have a net cost of $1,042 billion over the 2012–2021 period; that amount represents a gross cost to the federal government of $1,390 billion, offset in part by $349 billion in receipts and savings (primarily revenues from penalties and other sources).”

This response was met with scorn by Joe Weisenthal of Business Insider. "If you read the whole CBO report where that quote is taken fron, it makes it pretty clear that no, the ACA did not add to the deficit," he wrote, calling Ferguson's post "embarrassing."

Another economist, Brad DeLong, was equally scathing. Calling Ferguson a liar, he said Newsweek should "fire his ass."

Then the Atlantic did a full fact-check of the piece and found it very, very wanting.



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