New Christy Romer memo shreds Sanders' claims on economic growth

[MrWendel]

http://www.dailykos.com/stories/2016/2/25/1491522/-New-Christy-Romer-memo-shreds-Sanders-claims-on-economic-growth

By andrewj54

Christy Romer, formerly of the Council of Economic Advisors, and David Romer, have provided a response to those defending the growth claims embedded in Sanders’ policies. It’s eleven pages of what looks to me like rigorous economic analysis.

From the opening of the memo:

Unfortunately, careful examination of Friedman’s work confirms the old adage, “if something seems too good to be true, it probably is.” We identify three fundamental problems in Friedman’s analysis.

• First, all the effects of Senator Sanders’s policies that he identifies are assumed to come through their impact on demand. However, his estimates of those demand effects are far too large to be credible—even given Friedman’s own assumptions.
• Second, in assuming that demand stimulus can raise output 37% over the next 10 years relative to the Congressional Budget Office’s baseline forecast, Friedman is implicitly assuming that the U.S. economy is (and will continue to be for a long time) dramatically below its productive capacity. However, while some output gap likely still exists, the plausible range for the output gap is much too small to accommodate demand effects nearly as large as Friedman finds. As a result, capacity constraints would likely lead to inflation and the Federal Reserve raising interest rates long before such high growth rates were realized.
• Third, a realistic examination of the impact of the Sanders policies on the economy’s productive capacity suggests those effects are likely to be small at best, and possibly even negative.

(More in link)

[Thinkingabout]

1. I doubt the figures delivered by Sanders, they don't add up. The reasoning of

Saying the programs are working in other countries but not including the negative sides of the programs is giving a drug saying it will help something improve without giving the side effects is not always successful. Many likes capitalism and are willing to work hard to maintain ourselves.

[comradebillyboy]

2. Bernie's economic numbers are just as good a Paul Ryan's

but neither have any relationship to the real world.

[Thinkingabout]

3. Fuzzy math is still alive

[jmowreader]

4. Programs of the magnitude Bernie wants haven't ever been tried anywhere

They also come with far higher taxation than the American people will stomach.

[Thinkingabout]

6. Myself included. in some countries there are those who feel entitled,

I don't like that.

[Cha]

5. KICK!