According to Gerald Friedman, a respected professor of economics at the University of Massachusetts Amherst, personal income and the economy as a whole would boom under a Bernie Sanders’ presidency. In fact, according to Friedman, the median income would soar by more than $22,000 by 2026, 26 million jobs would be created, and the unemployment rate would fall to 3.8 percent.
According to Friedman, who holds a Ph.D. in Economics from Harvard, these are just a few of the many economic progresses that would happen if Sanders becomes president and his admittedly ambitious economic plan are put into place. Friedman provided a detailed analysis to CNN Money in what is the first comprehensive look at the total impact of all of Sanders’ spending and tax proposals.
The analysis completed by Friedman was not commissioned by the candidate nor his committee, although Sanders’ policy director did refer to it as “outstanding work.” Also, Friedman, who embraces the political movement of democratic socialism, has worked with Sanders in the past but never received any compensation for the work. Sanders had asked Friedman to estimate the cost of one program central to the Vermont senator’s core beliefs and driving principals — healthcare for all. The cost of such a plan is an estimated $13.8 trillion over a decade and was included in Friedman’s comprehensive analysis.
Friedman found that if Sanders becomes president and is able to push his plans through Congress, median household income would climb to $82,200 by 2026, which is significantly higher than the currently projected $59,300, a figure estimated by the non-partisan Congressional Budget Office (CBO).
In addition to skyrocketing median incomes, Friedman’s report shows that poverty would plummet to an unheard of 6 percent, compared to the CBO’s projected forecast of nearly 14 percent. The overall economy in the United States would grow by an estimated 5.3 percent, rather than the projected 2.1 percent, and the nation’s staggering $1.3 trillion deficit would turn into a large surplus by Sanders’ second term.
Central to Sanders’ economic plan is his push to inject a stunning $14.5 trillion into the economy, which includes major infrastructure spending, youth employment, an increase in social security benefits, expanding health care and family leave, and making college tuition-free. This, Friedman says, would “juice” both GDP and productivity. In fact because of this stimulation, Friedman estimates that the actual cost of Medicare-for-all would reduce to $10.7 trillion from $13.8 trillion since he estimates the government would save $3.1 trillion by eliminating the tax breaks given for health insurance premiums.
Sanders’ plan also centers around a significant raise for those in minimum wage jobs, as well as a shift in income from the rich back to the middle and working class through tax hikes
Friedman likens Sanders’ ambitious economic plan and goals to Franklin D. Roosevelt’s New Deal, a series of government plans and programs that put American to work in good-paying jobs and built infrastructure, among other significant economic and social programs.
“Like the New Deal of the 1930s, Senator Sanders’ program is designed to do more than merely increase economic activity. It will promote a more just prosperity, broadly-based with a narrowing of economy inequality.”
Every presidential hopeful claims that his or her economic program proposals will boost growth and stimulate the economy. Donald Trump and Jeb Bush, for example, attempt to justify their large tax cuts to the wealthy and corporations by saying that the GDP would grow at a rate of 4 percent, but their plans have been dismissed by experts as being, at best, overly optimistic.
Friedman explains that Sanders’ plan will be much more stimulating to the economy as it injects money directly into the economy rather than cutting taxes and hoping that the revenues somehow increase. Furthermore, several of Sanders’ proposals, such as his infrastructure spending, would happen within the first few years of his administration.
Simply speaking, Friedman explains, the enhanced government spending would increase the demand on businesses, who would then have a need to hire more workers to meet their growing needs. This would result in an obvious increase in employment, which would put more purchasing power into the pockets of the people who need it the most: the middle and working class. This would enable people to buy more, leading other businesses to also hire more in order to meet the increasing demand.
“If there is more spending, people will have more to do,” Friedman said.
He also stated that the share of the population with jobs could be brought back to the 1999 level of more than 64 percent, a marked increase from its current 59.6 percent.
Recently, 170 top economists endorsed Bernie Sanders and his plan to take on Wall Street in a stunning letter, openly embracing the Democratic candidate’s aggressive plan. However, some economists believe that Friedman’s analysis may be overly optimistic, stating that achieving that level of economic prosperity would be difficult and noting that the Committee for a Responsible Federal Budget said Sanders’ plan to pay for health care would fall short by at least $3 trillion over time.
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