Word: feldstein
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...debate over Feldstein's work has taken several twists over the last decade. The most notable one was in 1980 when Leimer and Lesnoy discovered an error in Feldstein's computer program that had overestimated by 37 percent the value of future social security benefits to which people are entitled...
...Feldstein responded by reworking his data and including new changes in social security benefit payments which were enacted in 1972--a 20 percent increase in benefits and automatic indexing of benefits to inflation. Based on these changes, which according to Lesnoy and Leimer did not consider all of the effects to future benefits in the 1972 legislation, Feldstein's corrected data supported his original view that social security benefits reduce private savings...
...Feldstein's 1980 defense of his original conclusions prompted new criticisms by Lesnoy, Leimer, and others. Articles by economists from such diverse groups as the liberal Brookings Institution and the conservative American Enterprise Institute questioned several of the assumptions in Feldstein's model. While some criticisms were based on theoretical disagreements and challenges to the life-cycle model, others were based simply on Feldstein's choice of data...
Lesnoy and Leimer released a series of papers criticizing Feldstein's conclusions after they discovered the programming error in his original work...
...Feldstein used data from 1930 to 1971 in his corrected estimates of the reductions in savings due to social security. Lesnoy and Leimer claim, however, that if only data from 1947 to 1971 are used, Feldstein would have concluded that social security payments actually cause a huge increase in private saving and that savings would actually have decreased were it not for social security...