Liberals and leftists have recently been going back and forth about the claim made by University of Massachusetts economist Gerald Friedman that Bernie Sanders's economic policies could produce 5.3 percent annual GDP growth. Several prominent economists, including four former Democratic chairs of the Council of Economic Advisers and J. Bradford DeLong, think this number is recklessly optimistic. Others, like James K. Galbraith of the University of Texas at Austin, have defended the seriousness of Friedman's analysis and questioned the intentions of his critics. "What the Friedman paper shows," Galbraith writes "is that under conventional assumptions, the projected impact of Senator Sanders' proposals stems from their scale and ambition. When you dare to do big things, big results should be expected. The Sanders program is big, and when you run it through a standard model, you get a big result."
Paul Krugman has sided with Sanders's critics, and dismissed much of the Vermont senator's agenda as a collection of "magical unicorns." Krugman's side demands that the Sanders campaign distance itself from Friedman's analysis, lest it infect the Democratic Party with the same kind of magical thinking that afflicts the GOP. Let Republicans offer voters unrealistic promises, this side says; Democrats are supposed to be grownups. Sanders's supporters have largely dismissed this criticism as yet more handwringing by a liberal establishment that feels threatened by anyone who thinks he can do more than President Obama has managed to do. Obama's "Yes we can" may have been a nice slogan in 2008, but in 2016, with Republicans in control of the House of Representatives for the forseeable future, it's time for "No we can't": No we can't have a single-payer system, or free college education, or a $15 minimum wage. Above all, we can't have a 5.3 percent growth rate. Of course, it's important to distinguish between different kinds of impossibility: a $15 minimum wage may be highly unrealistic for political reasons, but it's not economically impossible. In fact, it has already been adopted in several U.S. cities. But if Friedman's critics are right, 5.3 percent growth is impossible—or at least very unlikely—for purely economic reasons, including the country's aging population.
In his latest blog post, Krugman makes an important point that has been mostly overlooked in this debate:
[T]he great thing about a progressive agenda is that it doesn’t require big growth promises to make it work, because the elements of that agenda are good things in their own right. Conservatives need to promise miracles to justify policies whose direct effect is to comfort the comfortable (cutting taxes on the rich) and afflict the afflicted (slashing social insurance); progressives only need to defend themselves against the charge that doing good will somehow kill economic growth. It won’t, and that should be enough.
For Republicans, growth is the solution to every economic problem, and therefore the end that justifies any means: a rising tide lifts all boats, so focus on the tide. For the center-left, economic growth is a necessary but insufficient condition of a healthy economy. One of the most important lessons of the past thirty years is that GDP growth does not inevitably benefit everyone. It is possible for most of the gains of a growing economy to go to the rich, while the wages of lower-middle-class workers stagnate or decline. As Sanders often reminds us, the United States is the wealthiest country in the world. If we also have one of the highest child poverty rates among developed countries, it is not because our economy isn't growing fast enough but because we are failing to distribute our already vast resources fairly. As it happens, there are good reasons to expect that policies that would lead to lower unemployment and higher wages would also lead to more growth. Still, these policies are worth pursuing not because of their effect on GDP, but because they will help the millions of Americans whose boats have been sinking even when the tide was rising.