Report: Democratic Socialism Would Cost $42 Trillion Over 10 Years
- A new study found federal spending would go up to 60 percent of GDP after 30 years to fund Democratic socialist policies.
- Funding democratic socialist policies would cost $42 trillion over 10 years.
- The study took into account how much money the federal government would save by switching over to a single-payer health care.
It would cost $42 trillion over 10 years and $218 trillion over 30 year to fund Democratic socialist policies, according to a study.
Brian Riedl, a senior fellow at the Manhattan Institute, found federal spending would balloon up to 40 percent of GDP, about twice what it is now. It would surpass 60 percent after three decades, which would exceed all of Europe’s current levels of spending.
Democratic socialists such as Independent Sen. Bernie Sanders of Vermont and New York politician Alexandria Ocasio-Cortez argue a single-payer health care system would cost less in the long run than the current system in place now. However, Riedl argued that Sanders and his adherents have not found a way to feasibly pay for their policies.
“The Sanders 2016 campaign’s single-payer plan came up $14 trillion short, and his new legislation ignores the tax side altogether,” Riedl wrote. “If converting all the health savings from state governments, businesses, and families into a “single-payer tax” is so easy, why has no one come up with a blueprint? Until there is an actual plan that includes the necessary taxes, a fiscally responsible single-payer system will remain a fiction.”
Riedl also took into account how much money the federal government would save by switching over to a single-payer health care system and other proposals, such as guaranteeing jobs and tuition-free public college.
“Under the most generous assumptions possible, liberal proposals would cut $8.5 trillion on the spending side. To begin with, state governments no longer burdened with health care costs would save $4.1 trillion, according to the Urban Institute,” Riedl observed. “The popular leftist goal of slashing defense spending down to Europe’s target of 2 percent of GDP, for which there is no plausible blueprint, would nonetheless save $1.9 trillion if achieved, according to CBO data. Charitably assuming that the jobs guarantee would reduce antipoverty spending by one-quarter would save $2.5 trillion.”
Congress would still need to find an additional $34 trillion over 10 years on top of current federal spending. In order to pay for all of these policies, federal revenue would have to nearly double. Currently, Ocasio-Cortez has offered a list of tax increases that would raise $2 trillion over 10 years, according to the Congressional Budget Office (CBO).
Riedl argued that Congress would have to implement a 37 percent payroll tax (on top of the 15.7 percent payroll tax currently in place) and that was assuming massive defense cuts.
Even with defense huge cuts, it would take a 37% payroll tax (on top of current 15.3%) to pay for this $42 trillion
And don’t forget the surging budget baseline deficits that will require their own 15 percentage point across-the-board income tax hike to close.
— Brian Riedl (@Brian_Riedl) August 7, 2018
Riedl primarily used the CBO and left-leaning sources to come up with his numbers, though he also defended the Mercatus Center’s recent study which found that Medicare for All would cost about $32.6 trillion over 10 years. (RELATED: Report: Sanders’ Universal Medicare Could Top $32 Trillion)
Recently, Democrats have been pouncing on the Mercatus Center’s Charles Blahous’s findings that adopting a single-payer healthcare system would reduce healthcare spending by $2 trillion. The Washington Post’s Glenn Kessler pointed out that they were cherry-picking statistics from the study, as Blahous made it clear that the $2 trillion figure was unrealistic.
“In this case, it’s clear that Blahous bent over backward to accept Sanders’s assumptions, only to find they did not add up,” Kessler wrote. “Democrats cannot seize on one cherry-picked fact without acknowledging the broader implications of Blahous’s research.”
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