Bernie Sanders, Big Government, Socialism

Warning: Bernie Sanders Will Be Very Expensive to Your Wallet

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by Dan Mitchell

Almost everyone in Washington is talking about last night’s GOP debate. I sent out a few tweets as I watched, and my main after-the-fact observation is that there was very little discussion about the ever-growing burden of government spending, which is America’s most pressing economic problem.

But I’m a contrarian, so while everyone else is talking about Republicans, I’m going to focus instead on the Democratic side and address the fiscal agenda of Bernie Sanders.

The Vermont Senator has a voting record is almost identical to the scores received by Barack Obama and Hillary Clinton when they were in the Senate, so one might wonder whether there’s a rationale for his candidacy.

But Sanders is tapping into a desire on the part of many Democratic voters who want a candidate who openly and proudly advocates for big government.

And even if neither they nor Sanders actually know the technical distinction between socialism and traditional American-style leftism, there’s an appreciation for the fact that he actually says what he believes.

And he definitely believes that Washington knows best on the issue of spending money.

Writing for the Wall Street Journal, Laura Meckler reports on the price tag for Bernie Sanders’ agenda. It’s a big number, even by Washington standards.

Sen. Bernie Sanders…is proposing an array of new programs that would amount to the largest peacetime expansion of government in modern American history. …he backs at least $18 trillion in new spending over a decade… His agenda includes an estimated $15 trillion for a government-run health-care program that covers every American, plus large sums to rebuild roads and bridges, expand Social Security and make tuition free at public colleges. To pay for it, Mr. Sanders, a Vermont independent running for the Democratic nomination, has so far detailed tax increases that could bring in as much as $6.5 trillion over 10 years, according to his staff. A campaign aide said additional tax proposals would be offered to offset the cost of some, and possibly all, of his health program.

Here’s the breakdown of all the new spending.

The WSJ story also measures the degree to which the Sanders agenda would expand the burden of government spending.

…his agenda articulates the goals of many liberals and is exerting a leftward pressure on the party’s 2016 field. The Sanders program amounts to increasing total federal spending by about one-third—to a projected $68 trillion or so over 10 years. For many years, government spending has equaled about 20% of gross domestic product annually; his proposals would increase that to about 30% in their first year. As a share of the economy, that would represent a bigger increase in government spending than the New Deal or Great Society.

That’s good information, but keep in mind that the burden of government spending already is projected to climb substantially even without all of the new boondoggles being proposed by Sen. Sanders.

So what the Vermont Senator is really advocating is racing even faster in the direction of Greece.

And that means pressure for additional tax hikes. So the bad ideas being proposed by Sanders will just be the beginning.

If the big spenders succeed, we can also expect proposals for an energy tax, a value-added tax, a wealth tax, and a financial transactions tax.

Just in case you think I’m being unfair to Sanders, let’s now cite someone who argues that the $18 trillion figure is needlessly scary because all that’s really happening is that certain activities will be shifted from the private sector to government.

Here are some excerpts from a column in the Washington Post by Paul Waldman.

…while Sanders does want to spend significant amounts of money, almost all of it is on things we’re already paying for; he just wants to change how we pay for them. In some ways it’s by spreading out a cost currently borne by a limited number of people to all taxpayers. …we shouldn’t treat his proposals as though they’re going to cost us $18 trillion on top of what we’re already paying.

He cites a hypothetical example.

If I told you I could cut your health insurance premiums by $1,000 and increase your taxes by $1,000, you wouldn’t have lost $1,000. You’d be in the same place you are now.

In other words, notwithstanding my title, Waldman is saying that Sanders won’t be expensive to your wallet because he’s simply putting the government in charge of paying for certain things that are now privately financed.

That’s actually a (somewhat) fair point, but it overlooks two big issues.

First, there will a lot more redistribution and class-warfare taxation if Sen. Sanders is able to impose his agenda. So the people who are being fleeced today by the IRS will be subject to additional demands to cough up money.

In other words, Sen. Sanders’ plan is a threat to the wallets of the people who actually pay for government.

Second, bigger government will have negative effects even if we limit the analysis to folks who theoretically are held harmless (like Waldman’s example of a person paying $1,000 more in taxes but paying $1,000 less in health premiums).

That’s because people’s willingness to work is driven in part by a desire to purchase certain things, such as health care and/or health insurance. As illustrated by this cartoon parody, that incentive would be eroded if Sanders’ agenda is adopted and folks can get freebies from Uncle Sam.

And people’s willingness to work also is impacted by marginal tax rates. So they’ll have less incentive to engage in productive behavior because of all the tax hikes needed to finance the new spending proposed by Sanders.

Moreover, keep in mind that governments don’t use resources as efficiently as the private sector. That means more waste and less growth.

You don’t have to take my word for it. Even research from establishment organizations like the European Central Bank find that smaller governments are more efficient. And the normally left-leaning World Bank even acknowledged thatthe evidence is strong about bigger governments harming growth.

Let’s close with a political cartoon that showed up in my inbox. I have no idea if the cartoonist is trying to make fun of Republicans or make fun of Bernie Sanders, but he cleverly shows that Sanders embraces a term that others consider a slur.

If you want some political humor that is clearly anti-Sanders, you can click herefor two funny images.

  • John C. ‘Buck’ Field

    [Sanders supporters] “…want a candidate who openly and proudly advocates for big government.”

    Sanders advocates for specific increases in government in areas where law enforcement of the private sector is FAR more expensive. He thinks like our Founders. They advocated for Post Offices, military, and other federal systems for the same reasons.

    Yes, there is government growth…

    BUT: if the net effect reduces government waste overall (like healthcare), I’m for the socialist solution – just like every other advanced country on the planet…Led by Scandinavian countries like Sweden and Denmark.

    We are the richest and most dynamic nation, we need to retake our heritage of leadership!

    • Chief741A

      Buck, you want to turn us into England.

      They used to be the “richest and most dynamic nation”, too.

      • John C. ‘Buck’ Field

        There is much to admire in England’s history – and we could do much worse than England at its finest.

        Thanks to lazy people who mistake online snark for responsible citizenship, that’s exactly how we are doing: much worse than England at its finest.

        • Chief741A

          England is no longer anywhere near it’s finest, and you want to turn us into the England of today. Or France, or Italy, or take your pick.

          If you like the Scandinavian countries, move there and try to find a job. They invented the closed union shop. If you can find a job, don’t choke on your tax burden. The European countries tax their workers 25% to past 50% for their “free” healthcare, and their income tax piles on top of that. Why do you think the Beatles (and most British groups) moved to the USA? Because England taxed them as much as 95% of their income.

          Remember “Taxman” by the Beatles? “Here’s 1 for you, 19 for me”? That wasn’t hyperbole, that was the actual tax rate for wealthy Brits.

          No, thanks. You can have your European/Scandinavian states with their FDR taxes. I’ll stay here and fight for the America I grew up in.

          • John C. ‘Buck’ Field

            “…you want to turn us into the England of today. Or France, or Italy, or take your pick.”

            Do you really consider inaccurate hallucinations of others’ opinions to be proof?

  • David

    I agree with the argument, however the ‘key’ I think is pointing out to the average Democrat voter (whom is a ‘bleeding heart’ and/or college educated is that his first issue violates the Laws of Physics (for every action there is an equal and opposite reaction). He proposes to raise the minimum wage to $15/hr. It sounds good that minimum wage workers would be earning more money and be able to pay their bills (for a while). But the reaction would be a rise in prices, across the board (food & drink, housing, entertainment, etc) leaving the minimum wage worker worse off.

    • Chief741A

      Within a couple months of the adoption of a $15/hr minimum wage, the average burger flipper will find that he/she/it will STILL be working the same amount of time to pay for lunch.

      You are absolutely correct, David. But you can’t convince the left of that, no matter how many examples you present. Too many of them firmly believe that the entire nation can have “an above average income”, and you can’t convince them otherwise.

      • David

        It is possible to get the LIB’S arguing against themselves. The ‘key’ is using their own college education against themselves. Pointing out, “For every action their is an equal an opposite reaction” is a LAW OF PHYSICS.

        • Chief741A

          Well, yes, that is true. But then you are left with explaining what physics is to them. Most of them studied Psychology, or Fine Arts, or Social Work, or Ethnic Studies.

          • David

            If they have gone to college/university for 4+ years and have graduated with a level of IGNORANCE that includes not knowing what Physics is you can’t help them no matter how long you talk.

      • John C. ‘Buck’ Field

        “…no matter how many examples you present.” LOL!!

        When it comes to examples of neo-liberal economic theory, faux-conservatives stop at nothing!

        • David

          Laws of Physics are laws of Physics and NOT subject to interpretation.

    • John C. ‘Buck’ Field

      Kids generally know laws of physics are different than those of economics before they leave grade school.

      AFAICT: Partisanship makes people stupider than they’d otherwise be.

      • David

        The LAWS of PHYSICS are CONCRETE and set in stone. The THEORY of economics is just a fancy name for a GUESS.

        • John C. ‘Buck’ Field

          Since laws of physics progress, it would be misleading to say they’re concrete and set in stone. In fact, not setting ideas in stone is a necessary attribute for science. Also, what we call “laws” are called that for historical reasons – like “the law of gravity”. We don’t know exactly what gravity is, and but when we do, physics theory will move ahead and change.

          As for economics, it is true that it has many differences than “hard” physics, but this is not to say it is not a science. For more, google: “demarcation problem”.

          • David

            WRONG!!!! The Laws of Physics are CONCRETE. It’s our understanding that progress, not the LAWS.

          • John C. ‘Buck’ Field

            It sounds like you have a Platonic view of “ideal forms” for physic laws, but I can’t tell.

            Can you provide an example of such a law?

      • David

        Physics and economics are not similar. Physics involves a great deal of very high level mathematics, economics doesn’t require much past introductory calculus.

        Translation is PHYSICS is a higher level of science than Economics and therefore it’s Laws are control.

    • Chief741A

      It appears that “Buck” is a paid Sanders troll.

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