From: ff.org ByInvestor’s Business Daily
Socialism: Since the Democratic Party took a turn for the worse toward so-called democratic socialism, the party’s leading lights have laid the promises on pretty thick. Free Medicare for all! Guaranteed income! Guaranteed jobs! Subsidized housing! Free college! Universal pre-school! Wow, and all for free.
Well, not exactly. In a devastating piece that appeared on the left-of-center web site Vox (to its credit), Manhattan Institute fellow Brian Riedl went through the simple math of what free actually costs. It’s a lot.
It’s not just the free aspect, but the fact that the democratic socialists have made so many promises that must be paid for that will make it so tough to swallow for most voters.
Riedl looked at the 10-year costs of all the various promises made by Bernie Sanders, Alexandria Ocasio-Cortez, and other self-described democratic socialists. He was as generous as could be in his estimates, often accepting the democratic socialists’ cost estimate even when it was patently and absurdly too low. It’s quite a laundry-list of promises with enormous costs: “Free college” ($807 billion); Social Security expansion ($188 billion); single-payer health care ($32 trillion); guaranteed jobs at $15 per hour plus benefits ($6.8 trillion); infrastructure ($1 trillion); student loan debt forgiveness ($1.4 trillion).
As it is, current federal estimates expect about $44 trillion in tax revenues over that same period, with a deficit of roughly $12.4 trillion. Remember: All this democratic socialist spending comes on top of what we’re already spending.
Long-term, the fiscal picture grows progressively (forgive the term) worse.
“The 30-year projected tab for these programs is even more staggering,” wrote Riedl. “New proposals costing $218 trillion, on top of an $84 trillion baseline deficit driven by Social Security, Medicare and the resulting interest costs.”
Today, Riedl notes, total federal spending typically swings between 18% and 22% of GDP. But with the democratic socialist agenda in place, it “would immediately soar past 40% of GDP on its way to nearly 50% within three decades.” If you include state and local government, the total cost for this federal fantasia would equal 60% of GDP — more than any country in Europe.
Even after massive cuts in other programs, such as slashing defense by half, or adding in phantom savings from supposed cuts in state health spending and anti-poverty programs, you still come up $34 trillion short over 10 years.
To raise $34 trillion, Riedl calculates, would require “seizing roughly 100% of all corporate profits as well as 100% of all family wage income and pass-though business income above the thresholds of $90,000 (single) or $150,000 (married), and absurdly assuming they all continue working.”
Or, he said, you could go to a VAT tax — a national sales tax on all goods and services. But it would have to be huge: a tax of 87% on everything you buy. Oh, and by the way, that still doesn’t pay for the $12.4 trillion deficit that’s already estimated and that we discussed above. So you’d need even more taxes.
Those number are scary enough. But we’re not even raising the issues of: a.) massive cost overruns in these programs, which are inevitable; or, b.), whether these programs will work as described or instead end up ruining our free-market economy.
Not surprisingly, in public socialists say they won’t ruin free-market capitalism. They’ll save it!
Wrong again. As Meagan Day, a member of the Democratic Socialists of America, wrote (also in Vox): “Here’s the truth: In the long run, democratic socialists want to end capitalism. And we want to do that by pursuing a reform agenda today in an effort to revive a politics focused on class hierarchy and inequality in the United States.”
Americans should know that these are the very ideas that have destroyed the economies of the USSR, Cuba, Nicaragua, most of Africa, North Korea and, as we’re now seeing, Venezuela. And they’re not “democratic” at all. They’re just socialism.
Danger: Socialism Ahead
The bigger point is, these utopian ideas are not fiscally sane. And we mean that literally. They are a bizarre fantasy that should be discarded immediately by any reasonable person interested in an economically prosperous future.
That some believe that replacing capitalism with socialism makes you better off shows the profound failure of our nation’s education system. Because it’s something that has never happened in the history of mankind. And young people, who are among socialism’s most ardent fans, don’t seem to even know this.
The great economist, social thinker and professor Walter Williams recently summed up the struggle between capitalism and socialism: “Capitalism doesn’t do well in popularity polls, despite the fact that it has eliminated many of mankind’s worst problems, such as pestilence and gross hunger and poverty.”
To vote for socialism is to vote for national bankruptcy, a loss of freedom, a lower standard of living and an end to innovation. And be forewarned: As Venezuelans, Zimbabweans and Nicaraguans are now discovering, once socialists control things, they never give up power peacefully.