EDITORIAL: Democratic Socialism breaks the bank
A majority of Democrats have a favorable view of socialism. They don’t, however, know how to pay for it.
August 16, 2018 - 9:00 pm
Polls now show a majority of Democrats now have a favorable view of socialism. They don’t, however, know how to pay for it.
Last week, Manhattan Institute senior fellow Brian Riedl added up the costs of socialist programs proposed by progressives using figures from only left-leaning and nonpartisan sources. The liberal Urban Institute found that Sen. Bernie Sanders’ socialized medicine plan would increase federal costs by $32 trillion over 10 years. Increased Social Security benefits, “free” college and paid family leave would cost $1.27 trillion over 10 years. Then add in $9.2 trillion for a federal jobs guarantee, new infrastructure and wiping away all student loan debt.
That’s $42.5 trillion for new programs that would be added to the current projected deficit of $12.4 trillion. Revenue projections over the next decade are $44 trillion. The tax cuts that Democrats spent months decrying as budget busters cost less than $2 trillion.
If these new programs seem unaffordable, that’s because they are. Even after assuming unrealistic budget savings, that level of spending would require an 87 percent value-added tax, similar to a sales tax. Or a 100 percent tax rate on all corporate profits and personal income of more than $90,000 for single filers and $150,000 for married filers. Read that again: It would require the confiscation of all income earned above $90,000 for individual workers.
Mr. Riedl notes the country’s current deficits would require an additional 15 percent income tax hike on all filers. Good luck passing those tax increases, which is why Democratic socialists try to avoid talking about how much their programs would cost.
Remember, these were estimates using figures from progressive sources, meaning they almost surely underestimate the true costs.
This is the reason that California, even with Democrat supermajorities in both houses, couldn’t pass a single-payer health care plan last year. They couldn’t find the money. The proposal’s cost was double the state’s budget.
These programs don’t get any cheaper by taking an incremental approach, like Sen. Catherine Cortez Masto called for last week with health care. She said Medicare for all is “not plausible” in the short term but called for a “public option.” That’s the creation of a publicly run insurance company that could drive private insurers out of business by lowering prices and using tax dollars to subsidize its losses. It’s a significant step toward the unaffordable single-payer plans so loved by the left.
Many leading Democrat presidential candidates have embraced democratic socialism and its Utopian spending programs. Not one of them has come up with a realistic way to pay for it.
The promise of free stuff seems a lot less appealing when you realize you’re the one paying for it.