Several well respected and former Chairs of the Council of Economic Advisers have written an open letter to Senator Sanders and Gerald Friedman. The letter is below and it gets straight to the point. The Sanders economic numbers just don't add up.
To give you some background here, Friedman is saying that the Sanders plan will generate sustained growth of 4.5% each and every year for the next decade and that productivity growth will double compared to CBO projections.
Plus the employment population ratio will hit a percentage we have never seen in history. Of course, it works with their projections. Just plug in the numbers.
To put these claims into proper perspective, this type of sustained productivity growth hasn't occurred since World War II and even then it was 3.18%. Warren Gunnels, the policy director for the Sanders campaign, says this is feasible???
Kevin Drum wrote an article that highlights these claims and he provided a handy graph as well, pointing out the numbers that don't make any sense. He was very animated in his critique and rightly so. This is jaw dropping stuff.
I have to be honest here, this is literally making up growth and productivIty numbers to make Sanders unrealistic economic proposals work. Sanders proposals would require this type of robust economy to actually be feasible.
This is the type of 'make up as you go’ economic projections that Democrats have roundly criticize Republicans for concocting up. This shouldn't be coming from a Democratic campaign for President, as the letter to the Sanders campaign points out.
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.
m.motherjones.com/…
WTF? Per-capita GDP will grow 4.5 percent? And not just in a single year: Friedman is projecting that it will grow by an average of 4.5 percent every year for the next decade. Productivity growth will double compared to CBO projections—and in case you're curious, there has never been a 10-year period since World War II in which productivity grew 3.18 percent. Not one. And miraculously, the employment-population ratio, which has been declining since 2000 and has never reached 65 percent ever in history, will rise to 65 percent in a mere ten years.
I've generally tried to go easy on Bernie Sanders. I like his vision, and I like his general attitude toward Wall Street. But this is insane. If anything, it's worse than the endless magic asterisks that Republicans use to pretend that their tax plans will supercharge the economy and pay for themselves. It's not even remotely in the realm of reality. If it were, France and Germany and Denmark would all be Croesian paradises by now.
Look at the CBO projections in four key areas and compare them to Gerald Friedman’s projections. These numbers are way off the charts and numbers our economy has never seen in its history.
lettertosanders.wordpress.com/...
Dear Senator Sanders and Professor Gerald Friedman,
We are former Chairs of the Council of Economic Advisers for Presidents Barack Obama and Bill Clinton. For many years, we have worked to make the Democratic Party the party of evidence-based economic policy. When Republicans have proposed large tax cuts for the wealthy and asserted that those tax cuts would pay for themselves, for example, we have shown that the economic facts do not support these fantastical claims. We have applied the same rigor to proposals by Democrats, and worked to ensure that forecasts of the effects of proposed economic policies, from investment in infrastructure, to education and training, to health care reforms, are grounded in economic evidence. Largely as a result of efforts like these, the Democratic party has rightfully earned a reputation for responsibly estimating the effects of economic policies.
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.
Sincerely,
Alan Krueger, Princeton University
Chair, Council of Economic Advisers, 2011-2013
Austan Goolsbee, University of Chicago Booth School
Chair, Council of Economic Advisers, 2010-2011
Christina Romer, University of California at Berkeley
Chair, Council of Economic Advisers, 2009-2010
Laura D’Andrea Tyson, University of California at Berkeley Haas School of Business
Chair, Council of Economic Advisers, 1993-1995