Political season is something the business world often watches with a great deal of apprehension. The rise of fringe candidates, from the left and the right, is especially concerning to entrepreneurial interests everywhere. Above all, a stable and predictable business environment is what entices commercial enterprises to grow their operations and hire more people.
The last several years have been very unstable economically, and Millennials have felt the pinch. We’ve had to become fully-functioning and independent wage earners during a time when the odds were stacked against us. Naturally, this has affected our personal economic outlook and our politics. It’s not hard to comprehend why millions of young people are throwing their weight behind the first mainstream socialist candidate in decades. Many young Americans feel like the system is rigged, and that their failure to thrive in the richest country on Earth is simply unfair.
In comes Bernie Sanders to the rescue, with his grandiose plans to address growing inequality in America. His super-folksy campaign compelled many of my colleagues to fill my Facebook feed with a barrage of messages that pronounced their feeling of the “Bern.” In an environment where many of my peers are high on the “Bern,” I thought I would take a closer look at what plans the Democratic candidate has for America. After a quick glance, I came to fully comprehend the size and scope of changes that Sanders would push if he were to become president.
While they may sound cool and hip, Sanders’s populist promises would bankrupt this country. Make no mistake, Sanders’s promises would be insanely expensive and would break the back of the free-market American business culture. Tax hikes would be so game-changing that they would permanently alter the economic behavior of consumers, which would affect revenue collection. In simple terms, Sanders’s plans are so expensive that the outrageous taxation that he’s proposing may not be enough to cover the cost.
Taking a look at the staggering statistics will give you a clue as to why these plans are completely unrealistic. For example, providing every American with a single-payer, zero-deductible, zero-co-pay health plan is going to cost us an estimated 1.38 trillion dollars more per year, according to the Sanders’s campaign. To give you an idea of the mammoth size of this figure, our total federal budget is less than 4 trillion dollars. As it stands, we’re already running nearly a half a trillion dollar deficit. Instead of finding ways to address our reliance on debt, Sanders’s plan would expand the government by epic proportions, and ruin our national finances.
To make matters worse, that 1.38 trillion dollar figure for a universal, single-payer is likely far too optimistic. An article by the left-leaning website Vox, found that Sanders’s plan included $10 trillion in savings over the next decade from switching to a single-payer plan. Realistically, those savings will come from driving down reimbursements to doctors, hospitals, and pharmaceutical companies.
An environment of squeezing reimbursements would cause medical professionals to leave the profession in droves, and new cures and research would be shelved without an economic incentive to innovate. Considering healthcare makes up a whopping 17.5 percent of our total economic output, the economic consequences of such cuts would likely be extremely radical.
While Sanders’s tax plan would by far be the largest tax hike in American history, it still probably wouldn’t raise enough to cover the cost of his gigantic programs. Unfortunately, bludgeoning the rich with much higher taxes would also not address growing inequality.
A more likely case scenario under a Sanders presidency would be a contracting economy. Liberals and conservatives alike were weary of raising taxes during poor economic times. Considering the anemic economic growth that we’ve seen in the past decade, it’s not a good time to raise taxes. In sum, this type of taxation scheme would likely depress the economy, while chasing away trillions in wealth to countries with friendlier tax regimes.
“Feeling the Bern” is giving many Millennials the warm fuzzies, but that doesn’t translate into a better America. Sanders’s math doesn’t hold up in the face of basic computation, and would condemn us to a high-tax, low-growth economy. An educated inquiry into the populist rhetoric demonstrates how these promises are simply not possible.
Photo by DonkeyHotey
David is the Editor of Bold. He's especially passionate about millennial economic empowerment. A former local news reporter, David is originally from the Little Havana area in Miami, and later became a pioneer resident of the Disney-inspired town of Celebration, Florida. David holds a Master’s in Public Policy from the Harvard Kennedy School.