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The Democrats “debate” looked like an auction to me, or a poker game: “I’ll see you and raise you $10 trillion dollars!”
Both the promised benefits and the enormity of the crisis are up for bids. Voters are promised “health care” for all, student debt forgiveness, free child care, free parental leave, and guaranteed income, for starters. The peril has escalated from global warming to climate change, then to climate crisis or climate emergency, an existential threat to life on the Planet.
Details on financing are vague. Elizabeth Warren has so far evaded the question about increasing taxes on the middle class. But a clever Beatles parody song gives the answer: “All Bob’s money, I will give to you.” “Bob” is a nerdy-looking guy who lived with his parents and commuted to college. No posh student digs with an Olympic-size swimming pool and a rock-climbing wall. Bob got a job and has paid off his loans. Now he gets to help pay off other people’s debts. It’s only fair!
The “rich” will pay. And pay again. After-tax accumulation of wealth will be taxed each year. Like the property tax on your house, it amounts to rent on everything you thought you owned. In fact, “we all” own everyone’s wealth, say the Democratic Socialists, since “we” built the roads, paid for police protection, provided public education, etc., which were necessary for your business.
The effects will trickle down. Rich people, unlike the king who is in the counting-house counting out his money, will have to take money out of their bank accounts, depleting funds that the bank could loan. They will have to sell stock, depressing the price of stocks that you own—or that your pension plan owns. They will not be able to purchase a yacht or a new car, or throw a lavish party, or vacation at a luxurious resort. Do you build or sell or service yachts or cars, or own a catering business, or do the landscaping at a resort? You just lost customers and likely your job or your business. Will unemployed college graduates be able to take up the slack with their $1,000/month free money? Chances are they won’t even be able to pay rent, especially after all the expensive retrofitting for energy efficiency.
Bernie and the others seem to forget that a trillion is a thousand billion. So, if they sucked all the wealth out of 1,000 billionaires, they’d be only one-thirtieth or one-fortieth of the way to the estimated ten-year cost of Bernie Care. And as with the goose that laid the golden eggs, they could only do it once.
Bernie is not stopping with the wealthy. His Plan will vacuum up the Medicare Trust Fund—about $0.3 trillion in the Hospital Insurance (Part A Trust Fund)—plus all private insurance and expenditures. As “health care” has more than $3.5 trillion flowing through it very year, Bernie’s planners and enforcers theoretically might extract enough to redirect into its “free” and purportedly much more efficient dental, vision, medical, preventive, substance-abuse, “reproductive,” etc. care for every person who has managed to get into the U.S. Medical workers who lose their jobs when “providers” are paid 40 percent less could possibly be retrained to dust solar panels. Bernie might spare union members’ insurance plans, but where would they get care?
Other candidates would strangle the private sector slowly rather than all at once. There’s the public option that Obama Care architects rejected. They haven’t explained how they would calculate the price of a Medicare buy-in. Retirees paid the Medicare tax throughout their working lives, and now pay 25 percent of the cost of Part B (other taxpayers cover 75 percent). Workers’ payroll taxes are supposed to support them in their retirement years, and are not nearly enough. How can the program support people for decades longer, including immigrants who never paid the tax?
The taxes and the economic effects on the middle class and the poor would be more like an avalanche than a trickle, before we even start on the effects of shutting off 80 percent of the country’s energy supply to protect the climate. Former prosecutor Kamala Harris has promised to “take on” bad guys such as Big Oil.
If higher taxes, moralistic exhortations, and threats to put Americans in cages—the takeaway message of the debates—are the methods, what outcome should we expect?