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Fri Apr 1, 2016, 01:22 PM

Bernie Sanders Will Make the Economy Great Again

This article in The Nation is by Robert Pollin, Distinguished Professor of Economics and co-director of the Political Economy Research Institute at the University of Massachusetts–Amherst.

http://www.thenation.com/article/bernie-sanders-will-make-the-economy-great-again/

<The United States economy currently spends 17.1 percent of GDP on healthcare, while the UK, Australia, Canada, Germany, Japan, and France spend between 9.1 and 11.7 percent, respectively. All of these countries perform better than the United States, according to standard public-health measures such as average life expectancy. Within the context of the current US economy, the difference between spending 10 versus 17 percent of GDP on healthcare amounts to $1.3 trillion. That $1.3 trillion mark-up in US healthcare spending flows mainly into the coffers of big insurance and pharmaceutical companies. Do Sanders’s critics truly believe that it is impossible to devise a system whose administrative features roughly approximate those in Germany, Japan, the UK, France, Australia, or Canada? They have not advanced any serious arguments to support such a claim. Indeed, many of Sanders’s critics themselves have been proponents of single-payer prior to Sanders’s having incorporated it into his platform.>

<The economy overall will also benefit from the gains in equality tied to the minimum-wage increase. Greater equality means working people have more spending power, which in turn supports greater overall demand in the economy. Greater equality also means less money is available to flow into the types of hyper-speculative financial practices that led to the 2008–09 Wall Street crash.>

<The tax rates supported by Sanders includes 0.5 percent on all stock trades, 0.1 percent on all bond trades, and 0.005 percent on the underlying values of derivative trades, such as the value of a stock in a stock-option asset. These tax rates amount to $5 on the trading of a $1,000 stock; $1 on the trading of a $1,000 bond; and 5 cents through trading, for example, a stock option in which the value of the underlying stock itself is worth $1,000. By contrast, the average US consumer currently pays an average of 8.4 percent in overall sales taxes.>

<In a recent study that I co-authored with James Heintz and Thomas Herndon, we estimated that the Inclusive Prosperity Act could generate around $300 billion per year in new federal tax revenues (amounting to 1.7 percent of US GDP). This is after allowing that Wall Street trading would decline by an implausibly large 50 percent due to the tax. The Sanders campaign has estimated the cost of his free-college-tuition program at $75 billion per year. The $300 billion per year from the Wall Street tax could therefore cover this college-tuition program in full four times over. The Wall Street tax revenues could then provide something like another $225 billion to finance, for example, public investments in clean energy and infrastructure.>

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Arrow 10 replies Author Time Post
Reply Bernie Sanders Will Make the Economy Great Again (Original post)
BernieforPres2016 Apr 2016 OP
Orsino Apr 2016 #1
BernieforPres2016 Apr 2016 #3
Fresh_Start Apr 2016 #2
BernieforPres2016 Apr 2016 #5
Fresh_Start Apr 2016 #6
BernieforPres2016 Apr 2016 #8
Baobab Apr 2016 #4
Gwhittey Apr 2016 #7
pampango Apr 2016 #9
amborin Apr 2016 #10

Response to BernieforPres2016 (Original post)

Fri Apr 1, 2016, 01:27 PM

1. Time's running out for these badly needed corrections.

If we keep fucking around with placeholder Democratic caretakers hampered by obstructionist Congresses, the problems only get worse.

Commit to lobbying every level of govetnment, please, no matter who wins which election.

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Response to Orsino (Reply #1)

Fri Apr 1, 2016, 01:34 PM

3. Long term economic growth without a broad middle class is unsustainable

The old mantra of "we have to get the banks lending and people borrowing again" is bullshit. We have to get lower and middle class incomes up so they don't have to borrow to live.

As the real life guy who Gordon Gekko was modeled on in the movie Wall Street noted, when fabulously rich people get more money, they save most of it because they have about everything they need or want. When low to middle income people bring in more money, they spend virtually all of it. That creates more demand for products and services of all kinds and a stronger economy.

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Response to BernieforPres2016 (Original post)

Fri Apr 1, 2016, 01:34 PM

2. completely agreed with financial transaction taxes nt

nt

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Response to Fresh_Start (Reply #2)

Fri Apr 1, 2016, 01:40 PM

5. Wall Street hates it because it would shut down some business

High frequency trading is designed to use computing power and "information flow" to skim pennies by front running the trades of normal retail and institutional trades. It is basically theft from other market participants that adds no value to society whatsoever. A transactions tax would knock out a lot of that type of trading by taking away its financial viability, which is why it is appropriate to take existing volume down to compute what the tax would likely raise. But the idea that it would reduce trading by 90%, as economists who have attacked this plan have suggested, is laughable.

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Response to BernieforPres2016 (Reply #5)

Fri Apr 1, 2016, 02:19 PM

6. I love it precisely for the reasons they hate it

reduction in high volume arbitrage trading

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Response to Fresh_Start (Reply #6)

Fri Apr 1, 2016, 02:22 PM

8. Otherwise known as legalized theft

I know what arbitrage is, and high frequency trading isn't it. Front running is a better description. Arbitrage is a word they like to misappropriate to legitimize an activity that should be illegal.

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Response to BernieforPres2016 (Original post)

Fri Apr 1, 2016, 01:40 PM

4. We need to stop walling these options away with trade deels. We are tying our own hands

Why are they working night and day to sign our policy space away before the election?

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Response to BernieforPres2016 (Original post)

Fri Apr 1, 2016, 02:21 PM

7. So at what point do Third Wayers

 

Start to say Climate Change is a myth?

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Response to BernieforPres2016 (Original post)

Fri Apr 1, 2016, 03:40 PM

9. "Scandinavian-style social democratic policies" would be great for America.

Sanders’s support for Scandinavian-style social democratic policies ...

The key elements of Sanders’s program include a “Medicare-for-all” single-payer healthcare system; an increase in the federal minimum wage from $7.25 to $15 an hour; free tuition at public colleges and universities, to be financed by taxing Wall Street transactions; opposition to trade agreements like the North American Free Trade Agreement (NAFTA) that have weakened the wage-bargaining power of US workers; large-scale public investments to build a clean-energy economy and rebuild the crumbling US infrastructure; and strong Wall Street regulations to promote productive investments and job creation over casino capitalism.

Barack Obama’s presidency has certainly delivered important economic policy accomplishments, despite relentless Republican opposition. These include preventing a 1930s-level Depression after the 2008–09 Wall Street crash, steadily bringing unemployment down in the aftermath of the Great Recession, greatly expanding healthcare insurance coverage through the Affordable Care Act, and promoting clean energy investments.

In short, if something like a Sanders program is enacted in the United States, the critical point will not be whether GDP grows, on average, at 3 percent, 4 percent or 5.3 percent. A Sanders economy will be fully capable of growing at healthy rates. But more than just growing, a Sanders economy will also deliver standards of well-being for the overwhelming majority of Americans, as well as the environment, in ways that we have not experienced for generations.

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Response to BernieforPres2016 (Original post)

Sat Apr 2, 2016, 12:23 PM

10. KNR

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