Bernie Sanders’ economic platform has received a great deal of attention from academic interest groups, and people who believe the government should regulate our lives.
Most economists don’t take it seriously, and Sanders himself still hasn’t set forth a convincing explanation of where he expects to get the money to pay for his programs. The question is, does his assumption that government stimulus leads to economic prosperity fall down due to bad math, or poor economic reasoning?
Sanders’ basic premise is that his program would cause the GDP to increase by one-third in ten years, that jobs would be well supplied, and that inequality and poverty would be all but abolished.
It’s a staggering claim, but not one that any but a handful of liberal economists believe has any merit. A recent rebuttal to an academic rehashing of Sanders’ policy came from the University of California.
It revealed that the flaw central to Sanders’ Democratic Socialist fiscal policy is it assumes that a government stimulus would raise all boats and that the water would never recede- when in fact it would inevitably have to.
That is to say, Sanders believes that a government stimulus of the economy would boost the economy and that there would be no withdrawal effect when the stimulus expired. To Sanders’ credit, it’s a pretty common mistake- and it’s clear to everyone that he is not an economist.
It’s macroeconomics based on a microeconomic mindset. We may give Bernie some credit, he does seem to care about people. He wants to help.
But his domestic policy would be based on feelings, and not facts.
Like a person who, when bitten by a dog for the first time, yanks his arm out of the animal’s mouth- Sanders’ knee-jerk way of thinking will do much more harm than good. As everyone who knows anything about dogs would do- we should push our hand toward the bite- engage the gag reflex and free ourselves with reason, and less collateral damage.
Sanders appears to be abused of the idea that government money is unlimited, that it can be made from thin air- like mana from Heaven. But the stimulus he intends to disseminate would first come from the pockets of the taxpayer. That’s where all (legal) government funding comes from.
It really is exasperating that conservatives have to explain that simple fact so often. Sanders’ stimulus would be like rain on the desert floor- at first. Then it would be an all new crisis, as those who came to believe that Uncle Sam would pay for everything dry up in the permanent recession that results.
There are two way to look at Sanders’ plan. The first is to say that he’s just got the figures wrong. The second is to conclude that he simply doesn’t understand economics. Either way, his plan does not agree with any of the conventional models and studies which unanimously show that temporary stimulus has only temporary effects.
For ages conservatives and economists alike have insisted that the “progressive” economics of the left are not sustainable. They strive to pile on transfer program after transfer program in an effort to, literally, pass the buck- apparently in hopes that if we just keep moving money around everyone will get to touch it.
They don’t seem to realize that if I give you a dollar, while planning to snatch it from you the moment you have it- you have never, in effect, actually had that dollar. This is because money is, and has always been a symbol of wealth- not wealth in itself. If you give away money with no real wealth behind it, you’re giving away empty promises.
So many socialist regimes of the past have gone down the road Bernie would take us, and few- if any of their leaders ever felt the pain their policies brought down on their people.
Bernie Sanders’ sloppy thinking is the result of over 200 years of general prosperity- we have forgotten that we are actually doing very well- and are gearing up to fix something that isn’t (completely) broken.
It’s time for progressive political ideologues, like Bernie Sanders, to take responsibility of our current economic stagnation and give our economy what it needs to thrive- not scrap it and swap it out for something that only looks good on a college freshman’s t-shirt.
What our economy needs is a hefty dose of tax reduction, deregulation, and simplification. Unfortunately, if thinking like Sanders’ prevails, it will be a long hard slog before that ever happens.
Regards,
Ethan Warrick
Editor
Wealth Authority
