How Much Of Your Economic Freedom Do You Want To Preserve? Democrats Aim To Double The Size Of Government.
Leading Democrats are pushing an agenda that would more than double the size of the federal government. This comes as a new Gallup Poll finds that the public views government as the most important problem facing the country today.
Another Gallup poll finds that, despite all the focus on left-wing celebrities like Alexandria Ocasio Cortez, the country remains far more conservative than liberal — with 35% saying they are conservative compared with 26% who are liberal. The rest fall in the middle.
More ‘Socialist’ Than Sweden
Nevertheless, many in the Democratic Party are rushing to embrace policies that would, if enacted, result in government controlling a bigger share of the U.S. economy than “socialist” countries like Sweden or Norway.
There’s no doubt that each of these proposals has a bumper sticker appeal: “Medicare for all,” “universal Pre-K,” “universal free college,” “guaranteed jobs,” “paid family leave,” expanded Social Security benefits, a federal $15 minimum wage. They all poll well, at least.
But the costs to implement any one of them would be staggering. “Medicare for all,” for example, would cost, conservatively, $32 trillion in its first 10 years. The “guaranteed jobs” price tag is about $7 trillion over a decade. Universal Pre-K: $150 billion. Free college: $750 billion. The “Green New Deal” — untold billions.
When the Manhattan Institute added up the cost of this expansive agenda, the price tag totaled $42.5 trillion over 10 years, or roughly $4.2 trillion a year. And that’s likely a lowball estimate, since government programs almost always end up costing far more than expected.
Exactly how big is this tab? Well, consider that in 2018, the federal government spent a grand total of $4.1 trillion.
So, we are talking about more than doubling the size of the federal government.
58% of GDP
It would result in the federal government controlling more than 40% of the nation’s GDP. When you add in state and local spending, the result would be that government would control 58% of the nation’s economy.
That’s a bigger share than supposed socialist role model countries like Finland, where government spending accounts for 57% of that country’s economy, Sweden (49%), Norway (48.8%), the Netherlands (44.5%), or the U.K. (42%).
In fact, this Democratic agenda would, if enacted, result in a bigger government than any of the other 35 industrialized countries in the Organization for Economic Cooperation and Development. So much for Democratic President Bill Clinton’s declaration that “the era of big government is over.”
What would it take to finance a government of this magnitude?
225% Tax Hike
As it stands today, federal tax revenues are about 17% of GDP. That’s about the average since World War II, despite the myriad changes in the tax code over those years.
To pay for those new programs — without adding to the already nearly $1 trillion in annual deficits — would require a 225% increase in federal taxes.
However appealing this agenda might sound. It would constitute economic suicide.
This editorial first appeared at Investors Business Daily (https://www.investors.com) on Jan 18th, 2019