New Christy Romer memo shreds Sanders' claims on economic growth

[riversedge]

GREAT read......

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

By andrewj54


Thursday Feb 25, 2016 · 8:40 PM CST

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.

From the closing:

[NurseJackie]

1. People are paying attention and realizing that all is not as it seems ...

... and that promises being made are not as easily delivered as originally thought.

[virtualobserver]

2. just a partisan opinion....nothing more

economics is not a science.

there are conservative economists, centrist economists, and liberal economists.

[oh08dem]

3. The promise of someone who will fight tooth and nail for progressive programs

is why I support Bernie, I mean, whats the alternative? Support Hillary and pray every night that she doesn't capitulate to the GOP on something like raising the retirement age?

Then forced to defend her cause, you know, she's a democrat after all.

Then forced to vote for her four years from then, cause go team!

Nope.

With the house being controlled by the GOP, I want Sanders, and we need Sanders to fight and not give an inch. Or are you honestly telling me that Hillary wouldn't leap at the chance to sign legislation that will harm progressive programs and thus harm the democratic party for years to come?