Sanders’ proposals: the numbers really don’t add up

There are two important blog posts from Paul Krugman:

1. His plans depend on unrealistic assumptions:

I’ve tweeted this out, but want to point out that this is a pretty big deal: Four former Democratic chairs of the Council of Economic Advisers have put out a letter warning that Bernie Sanders’s economic program contains a very worrisome amount of voodoo:

We are concerned to see the Sanders campaign citing extreme claims by Gerald Friedman about the effect of Senator Sanders’s economic plan—claims that cannot be supported by the economic evidence. Friedman asserts that your plan will have huge beneficial impacts on growth rates, income and employment that exceed even the most grandiose predictions by Republicans about the impact of their tax cut proposals.

As much as we wish it were so, no credible economic research supports economic impacts of these magnitudes. Making such promises runs against our party’s best traditions of evidence-based policy making and undermines our reputation as the party of responsible arithmetic. These claims undermine the credibility of the progressive economic agenda and make it that much more difficult to challenge the unrealistic claims made by Republican candidates.

2. His making these claims really gives Democrats a credibility problem:

But here’s what Friedman has said, in what the campaign’s policy director calls “outstanding work”:

– Real growth at 5.3 percent a year, versus a baseline of around 2
– Labor force participation rate back to 1999 level
– 3.8 percent unemployment

OK, progressives have, rightly, mocked Jeb Bush for claiming that he could double growth to 4 percent. Now people close to Sanders say 5.3??? Even those of us who believe that there’s still significant slack in the US labor market are aware that much, probably most, of the decline in labor force participation since 1999 reflects an aging population — prime-working-age LFPR has reclaimed most of the lost ground since the Great Recession, and there’s probably a long-term downward trend even there. It’s possible that we can get unemployment down under 4 percent, but that’s way below any estimates I’ve seen of the level of unemployment consistent with moderate inflation.

The point is not that all of this is impossible, but it’s very unlikely — and these are numbers we would describe as deep voodoo if they came from a tax-cutting Republican.

Now I am directing this toward the more thoughtful Democrats. Krugman points out that these critiques won’t be taken seriously:

And if your response to these concerns is that they’re [the economists critiquing Sanders’ numbers] all corrupt, all looking for jobs with Hillary, you are very much part of the problem.

Yes, I love to chortle at how much influence the anti-intellectuals have in the Republican party. But sadly, we have such people on “our” side as well. You find them attacking things like GMO foods and supporting candidates that pander to their fantasies.


February 17, 2016 - Posted by | economics, economy, politics, politics/social | ,

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