- The central idea in Friedman's analysis is that taking $1 from Peter to give to Paul raises overall income by 55 cents. From this, you get multipliers from raising taxes and spending, from higher minimum wages, more unions, and so forth.
- I chuckle a little bit that so many economists who previously liked multipliers now don't like their logical conclusions.
- The Romers charge a serious, elementary arithmetic mistake in treating levels vs. growth rates. If they're right Friedman's whole analysis is just wrong on arithmetic.
One might have expected that a sympathetic analysis of the Sanders plan would say, look, this is going to cost us a bit of growth, but the fairness and (claimed) better treatment of disadvantaged people are worth it.
Friedman's having none of that. In his analysis, the Sanders plan will also unleash a burst of growth, claims for which would make a fervent supply-sider like Art Laffer blush.
"The Sanders program... will raise the gross domestic product by 37% and per capita income by 33% in 2026; the growth rate of per capita GDP will increase from 1.7% a year to 4.5% a year." And, apparently, raise the growth rate permanently.