Top Economist Says Bernie’s Plan Will Actually SAVE the US $5 Trillion|
Capitalism is expensive.
On Monday, the Wall Street Journal published an article claiming that presidential candidate Bernie Sanders “backs $18 trillion in new spending over a decade.” Since then, multiple media outlets have refuted that claim with a litany of facts and basic policy changes which could make the actual cost for his proposed programs negligible by replacing current government programs that are bloated and inefficient.
Accurate or not, the $18 trillion figure has immediately conjured images of red flags bearing the likeness of Karl Marx waving over crowded plazas filled with American citizens standing in line all day to buy eight-dollar rolls of government toilet paper. It was intended to scare people and tell them that Sanders intends to spend America into bankruptcy.
But would he?
Bernie Sanders is confident that his brand of “Democratic Socialism” could replace our current system of “Corporate Welfare.”
So what does a Sanders solution look like?
America currently ranks 11th in the world in minimum wage with an average take-home pay of $6.26 per hour. We would be a lot further down the list if Socialist nations such as Finland, Sweden and Switzerland were included. But they don’t have or need a minimum wage because they have strong enough labor unions who collectively bargain for high enough wages that workers make a living wage.
Since America no longer has large unions, Sanders is looking to raise the minimum wage to $15 per hour, which would directly benefit 62 million workers and immediately increase consumer spending and tax revenues.
While the Bureau of Labor Statistics is reporting the U.S. unemployment rate is only 5.1%, they also show that there are currently 93 million Americans not in the labor force; which is the worst rate in the last 37 years. With so many people out of work and under-employed, the economy has continued to shrink even though it is being buoyed by low oil prices.
Sanders is advocating a $5.5 billion federal jobs program which would create employment for approximately one million young Americans through his “Employ Young Americans Now Act.” His plan, rather than to increase taxes on working class Americans to pay for it, is to reduce the $200 billion that is spent on public safety, including $70 billion on correctional facilities. His inspiration comes from Sweden, where they continue to close prisons due to low unemployment and better programs.
With young Americans drowning in Student Load debt, only 1/3rd of people 35 and under owns their own home; which is the lowest number since the Census Bureau started tracking home purchases in 1982. Additionally, the widening income gap is creating fewer homeowners and more renters…who are also paying, on average, 14% more for rent than in 2009.
Sanders is looking to boost home ownership by increasing the people who can afford to buy a house. His plan would entail following countries like Norway who have higher corporate taxes and fewer loopholes for industries and investments. This, combined with a “Robin Hood Tax” on stock trades, would create less student debt by reducing education costs and create a more robust housing market.
The meat of the Wall Street Journal article, which started the media questioning of just how Bernie Sanders was going to pay for his proposed “Single Payer Health Care” stated that America would have to spend $15 trillion over the next decade. This seemed like a reach as every single single-payer health system in the world is cheaper than the current American health care system.
Well it turns out that Gerald Friedman, the economist whose analysis was used for the WSJ article saw it and wrote an open letter to them explaining that Sanders’ single payer healthcare proposal would actually SAVE America $5.08 trillion dollars over the next 10 years.
There is no doubt that Sanders is looking to spend to fix our stagnant economy. But that is no different than any other candidate. The only question is, how are they looking to spend it?