Bernie’s financial plan overpromises

It goes without saying that politicians running for the nation’s highest office have an incentive to exaggerate the merits of the policies they plan to bring to the White House.

However, how often does a group of economists of a certain party gang up on one of their own because they believe that a candidate’s claims are unrealistic? This is exactly what recently happened in the Democratic Party.

Last week, four Democratic economists who served as the chairs of the Council of Economic Advisers under Presidents Obama and Clinton wrote an open letter to the Bernie Sanders campaign. They criticized the Senator’s promises regarding the potential economic impact of his plans, which include an expansion of public sector spending, a more progressive tax system and tuition-free public college.

In their letter, the four liberal economists specifically addressed an economics professor Gerald Friedman, who is often cited and praised by the Sanders campaign. Friedman works at the University of Massachusetts and he projects that Sanders’s economic plan would yield a 5.3 percent GDP growth per year over the next decade, more than double our current growth rate. Regarding these claims, the economists stated that:

“As much as we wish it were so, no credible economic research supports economic impacts of these magnitudes. Making such promises runs against our party’s best traditions of evidence-based policy making and undermines our reputation as the party of responsible arithmetic. These claims undermine the credibility of the progressive economic agenda and make it that much more difficult to challenge the unrealistic claims made by Republican candidates.”

Paul Krugman, a Nobel Prize winning economist and prominent liberal commentator, also gave his opinion. Krugman rarely hesitates to criticize the outlandish economic growth projections of politicians, and like the other economists, he posited that such far-fetched forecasts are a problem not only for Sanders, but for the Democratic party as a whole.

Krugman is no enemy of the left – in fact, the reason he finds Sanders’s claims concerning is because they undermine the left’s ability to argue that the Republican’s economic agendas are far-fetched. In a New York Times op-ed last week, he writes that “fuzzy math from the left would make it impossible to effectively criticize conservative voodoo.”

As someone who proudly does not identify with either the Democratic or Republican parties, I look for pragmatism in candidates: their desire and ability to compromise, break through ideological deadlock and to be rational, reasonable and level-headed, especially when it comes to economics.

Unfortunately, these traits have been difficult to find in this year’s crop of contenders, and it is frustrating to see claims such as these coming from the Sanders’s campaign. The fact that they are promising five percent growth is extremely far-fetched, especially in today’s macroeconomic environment which many economists view as a global slowdown in growth. Regardless, droves of people believe Sanders’s claims.

What’s even more frustrating is that many of Sanders’s ideas are very good; he is the only candidate that seems to touch on the corruptive and corrosive power money has in politics today. The truth is that these unrealistic claims demonstrate that Sanders is fishing for voters through over-promising, which, to my mind, is not a sign of pragmatism.

I worry that when politicians on one side exaggerate the merits of their economic plans it encourages other candidates to do the same.

Moreover, there are good reasons to defend a more progressive tax system: more public spending on infrastructure, more stringent regulation of the financial sector and breaking up too-big-to-fail banks. However, to say that our growth could magically double as a result of these plans reflects a failure to understand the state of the U.S. economy. These ideas are good, but they don’t have to be “sold with fairy dust,” to borrow Krugman’s phrase.

Just look at history. Since 1960, 10-year real growth of GDP per capita has hovered around two percent per year, with a high in 1969 of 3.5 percent and a 2014 low of 0.5 percent. Yet the Sanders campaign’s projection is that his economic agenda will result in a per-capita growth rate of 4.5 percent.

However, as Krugman says “There’s just no way to justify this stuff and for wonks like me, it is, frankly, horrifying.”

Owen Sandercox ’19 (sander2@stolaf.edu) is from Newtown, Conn. He majors in conomics and statistics.

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