What Has the Wonks Worried by Paul Krugman

[applegrove]

What Has the Wonks Worried

by Paul Krugman at the NY Times

http://krugman.blogs.nytimes.com/2016/02/17/what-has-the-wonks-worried/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&_r=0

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The open letter to Sanders and Friedman by former CEA chairs didn’t get into specifics, and I’m already hearing from Bernie supporters accusing them of arrogance, or high-handedness, or something. 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.




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