Bernie Sanders' economic position of Democratic Socialism has shaken up a US political landscape that has traditionally leaned towards different forms of market or corporatist economics.
There's a whole lot of debate over the effects of the changes of his economic plan. Most of us aren't full-time economists, so we rely on the analysis of others to help us understand what the impacts of his plan might be.
One analysis by a "top economist" at UMass Amherst paints a very rosy picture:
The analysis estimated that the median income would rocket to $82,200 by 2026, far higher than the projection of $59,300 currently estimated by the Congressional Budget Office. Poverty would drop to 6%, compared to 13.9% under the CBO’s numbers, and the economy would grow by 5.3% compared to 2.1%.
Sounds awesome. And, indeed, it made the rounds on social media. Sanders' campaign manager endorsed the analysis.
If this happened, it would be quite amazing. The US has never sustained anything close to such growth since we started measuring it carefully, and no first-world country (like in Europe) has done it either.
Other Democratic economists have sent an open letter to the campaign and the economist claiming that the analysis doesn't make sense, going so far as to say that the analysis "undermines the credibility of the progressive economic agenda." Mother Jones claims that the analysis "crosses into Neverland."
On the other hand, the Tax Foundation (a think tank) ran an analysis of Sanders' tax plan and reached a nearly opposite conclusion:
Were this model true, it would spell economic disaster. Note that these numbers are a ten-year comparison to the status quo, rather than absolute.
Is this the correct analysis? Some economists have claimed that the Tax Foundation is not a reliable source, and their 2016 candidates' analysis also has a number of critics.
So who do we believe? In short, STC can't provide the answer: we're not a crack-squad of economists with a track record of getting everything right.
The problem is that largely speaking there aren't any such teams. One can go to a conference of the best economists in the world and hear wildly dissenting opinions on the best course of action a country can take. There are some principles everyone agrees to--Venezuela's economic management, for example, has been a disaster, and economists can agree on why it's been so bad. Supply and demand generally drives prices, and markets produce innovation. This stuff we can agree on.
But tax rates, minimum wage, and other government policies are the stuff of pretty endless debate.
Something to consider: do you want to believe the broad strokes of one of these two analyses? Do you have the economic training to be able to discern which professional economists are wrong and which are right?
For those of us going to the polls, this is important: buying into the narrative we want to be true--whether it supports or opposes Sanders' economic plan--could cost a great deal in potential prosperity if it doesn't happen to actually be true.
In this, there is no easy answer: we can rely only on deep research and our own judgment. But each political faction--whether they are the establishment or tribes on social media--will try to pitch these narratives to you. Blindly embracing the one you prefer is likely to lead us down the road of folly.