A new report from the president’s Council of Economic Advisers takes a look at what would happen to the United States if we were to adopt the socialist proposals endorsed by Sen. Bernie Sanders and others…and the results are not pretty. In “The Opportunity Costs of Socialism,” the authors conclude that implementing programs such as Sanders’ “Medicare-for-all” would immediately reduce the size of the U.S. economy by 40%. That, they note, would be the equivalent of stealing $24,000 a year from every American citizen.
“Coincident with the 200th anniversary of Karl Marx’s birth, socialism is making a comeback in American political discourse,” the report states. “Detailed policy proposals from self-declared socialists are gaining support in Congress and among much of the electorate.”
Unfortunately, the authors write, if those programs were to go into effect, they would begin devouring nearly all of the current federal budget. It would either take enormous tax increases or gigantic cuts to Social Security and national defense to make up the shortfall. If politicians were to go the tax route, the Medicare-for-all plan alone would reduce the gross domestic product of the U.S. by 9% due to lowered market incentives.
In a conference call with reporters, Council of Economic Advisers chairman Kevin Hassett said that one need look no further than the failing state of Venezuela to see the perils of inviting socialism onto our shores.
“When you have a breakdown in the rule of law, and you take away private-property rights, it’s not unusual to have a pattern of destabilization,” he said. “When you undermine property rights, it undermines stability.”
Hassett also said that critics who point out China’s relatively smooth-sailing economy (well, until the Trump tariffs knocked it in the dirt) were missing the truth about the Communist regime. He said the Chinese had a “hybrid” economy that kept market forces and private property rights as an integral part of the mix. Furthermore, he said, those pointing to the Nordic countries of Sweden and Norway should be aware that moving to their way of life would mean a lower standard of living for the average American.
“American families earning the average wage would be taxed $2,000 to $5,000 more per year net of transfers if the United States had current Nordic policies,” the report notes. “Living standards in the Nordic countries are at least 15 percent lower than in the United States.”
Funny how we don’t recall Sen. Sanders ever mentioning that tidbit in his speeches.