[wsj-responsive-image P="http://ift.tt/1Qziu18" J="http://ift.tt/1R48KfQ" M="http://ift.tt/1S3A2YL" caption="Bernie Sanders, shown at a rally Feb. 21 in Greenville, S.C., has issued plans that are 'ambitious in getting health care costs down,' a former Clinton administration official said." credit="John Bazemore/Associated Press" placement="Inline" ]
Bernie Sanders’s presidential campaign embraced on Wednesday a hotly contested analysis published last month by an unaffiliated economist that said Mr. Sanders’s policies could usher in a period of sustained growth not seen in decades.
The Democratic campaign organized a conference call with three other academics to defend the analysis by Gerald Friedman, a professor of economics at the University of Massachusetts-Amherst, after several other prominent liberal policymakers dinged his work as extreme and irresponsible last week.
Mr. Friedman wrote that the cumulative effect of Mr. Sanders’s plans on health care, infrastructure and education could boost growth in gross domestic product to 5.3% annually, up from 2.4% in each of the past two years. The unemployment rate would fall to 3.8% by 2021, and a deficit that congressional budget analysts project will reach $1.3 trillion in 2026 would instead turn to a surplus.
Mr. Friedman’s analysis was “well within the bounds of reasonable expectations,” said Robert Reich, a professor of public policy at the University of California at Berkeley who served as labor secretary under President Bill Clinton, on Wednesday’s call.
Mr. Reich pointed to the conditions of the late 1990s to support the idea that 5.3% economic growth is achievable. “One of the biggest reasons for this kind of success coming out of the Sanders plan has to do with the magnitude of the plan. If you are ambitious in getting health care costs down, you get big results,” he said.
By digging in with a defense of the projections rather than letting the flap fade away, the Sanders campaign highlighted a growing split between left and far-left economists. The campaign also made clear that it was eager to defend an analysis that it hadn’t commissioned.
In a letter published online last week, all three of President Barack Obama’s former top economists and a fourth economist who held the same post for President Bill Clinton, warned that Democrats were risking their economic credibility by touting such “extreme claims.”
“As much as we wish it were so, no credible economic research supports economic impacts of these magnitudes,” said the economists, Austan Goolsbee of the University of Chicago, Alan Krueger of Princeton, Christina Romer of Berkeley, and Laura D’Andrea Tyson, also of Berkeley.
The economists and several other prominent liberal commentators, including Nobel laureate Paul Krugman, have argued that Democrats will undermine their authority to reject similarly outlandish claims from Republicans by indulging in a “growth miracle” to sell their economic vision.
They have argued that an aging population that is depressing labor-force participation and a sustained slowdown in productivity growth require greater modesty in assuming that the U.S. can return to growth rates seen during the 1980s and 1990s.
The Sanders campaign mounted its rebuttal by turning to economists including James Galbraith of the University of Texas at Austin, who has advised the far-left Syriza party that has governed Greece since its electoral upset in January 2015, and William Black of the University of Missouri-Kansas City, who has been sharply critical of the Obama administration’s lack of criminal prosecutions following the 2008 financial crisis.
Mr. Galbraith said Mr. Friedman had conducted a “thorough and careful job” reaching a “straightforward conclusion.” His report “came in for an unjustified and unfair attack from a number of prominent economists,” he said.
Mr. Black said the “vituperative nature” of last week’s critiques improperly implied that Mr. Friedman’s analysis was “obviously absurd.”
“The answer is boldness,” he said. “If you have a much bigger plan, you get much bigger results. That’s how mathematics works. If you don’t like mathematics, you have a problem with all of this.”
Mr. Friedman, for his part, said he has not decided whom he will vote for in the coming primary election, but he said he has given $10 every month to Hillary Clinton.
from Real Time Economics http://ift.tt/1R48Kwq
No comments:
Post a Comment