Whether most Americans prefer Sanders’s statist agenda to the alleged abuses of corporations and Wall Street (the notorious “top 1 percent”) is what defines this election. Whatever the case, Sanders is proposing a hugely expensive transformation.
Let’s examine the $50 trillion. The list below shows various spending programs that Sanders has proposed, with one important exception: The first item on the list is the Congressional Budget Office’s estimate of the deficits under existing policies for the next decade. That figure is $13.1 trillion.
Sanders’s Spending, 2021-2030:
1. Deficits under existing policies: $13.1 trillion
2. “Free” college for all and the cancellation of existing student debt: $2.2 trillion
3. Expand Social Security and other retirement benefits: $1.4 trillion (estimated by the Progressive Policy Institute)
4. Housing for all: $2.5 trillion
5. Eliminating household medical debt: $81 billion
6. Green New Deal (programs to stop global warming): $16.3 trillion
7. Universal child care and preschool: $1.5 trillion
8. Medicare-for-all: $17.5 trillion
Total: $54.6 trillion
We can round off the total to $50 trillion. The object is not a precise estimate down to the last penny. The goal is to determine a correct order of magnitude for Sanders’s plans. An estimate by the Progressive Policy Institute, a research and advocacy group, reached a similar total: $53 trillion.
To put these numbers in perspective, the CBO projects that, under existing laws, the federal government will spend $60.7 trillion over a decade. If Sanders’s program costs $50 trillion over the same period, the size of government would expand by roughly 80 percent. If all the spending were covered by deficits, the publicly held federal debt would rise from $16.8 trillion in 2019 to $66.8 trillion in 2030. If all the spending were covered by tax increases, the overall level of taxation would roughly double.
Granted, all these projections are subject to qualifications. Still, they reveal the make-believe quality of Sanders’s agenda, which is also largely mirrored by the proposals of his Democratic rival Sen. Elizabeth Warren (Mass.). The presumption seems to be that if you want a new social program, whether Medicaid-for-all or free college, all you have to do is dial it up and the super-rich will pay for it.
This is a fantasy that, unfortunately, is sustained by simplistic media coverage that ignores the collective impact of all these various proposals.
“Sanders’s proposals won’t raise nearly as much money as he thinks they will,” says Howard Gleckman of the nonpartisan Tax Policy Center. “Even if they did, they won’t pay for everything he wants.”
For example, Sanders proposes a wealth tax on taxpayers with a net worth (assets minus liabilities) of $32 million or more. The tax would gradually rise from 1 percent up to 8 percent on fortunes exceeding $10 billion. Sanders estimates this would raise $4.35 trillion over a decade.
Not likely, says Gleckman. About half of the wealth of the rich is contained in privately held businesses that, unlike publicly traded stocks, are hard to value. He thinks the tax would raise far less than expected. “Rich people won’t stand by and pay taxes,” he says. “They will hire expensive lawyers to avoid taxes.” Similar problems would erode revenue from a proposed tax on financial transactions, he says.
Even with some added tax revenue, there still would be a $25 trillion gap between Sanders’s spending plans and an equivalent amount of new tax revenue, says analyst Ben Ritz of the PPI. Federal spending would approach 40 percent of gross domestic product, up from about 20 percent now.
The crucial issue is not deficits; it’s what kind of government Americans want. Sanders and Warren advocate a high-tax-and-benefits system, patterned on European welfare states. Government expands power at the expense of private control. In truth, we’ve already gone a considerable distance down this path.
Do we want to go further? Our society is part socialist and part capitalist. The Sanders-Warren vision would make it less capitalist. The federal government would become an even larger apparatus for transferring wealth and income from one group to another. Economic growth would matter less than economic redistribution.
The danger of the Sanders-Warren approach is that we may overload the political system, assigning it more tasks than it could possibly accomplish — and making more promises than it could possibly keep. The irony is palpable: What is undertaken to raise government’s reputation may actually have the opposite effect by fanning disillusion.
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