(Brad Polumbo, Foundation for Economic Education) From Iowa to Indiana, Senator Bernie Sanders is hitting the road. The Vermont socialist has a simple mission: reach out to rural America and make the case for the $4.5+ trillion government spending plans his allies are trying to push through Congress.
The massive spending proposals include everything from a trillion-dollar infrastructure bill to the creation of a “Civilian Climate Corps” to healthcare subsidies for wealthy Americans to taxpayer-funded community college to electric vehicle subsidies. (And much, much more).
In his pitch to blue-collar Republicans, Sanders is painting the spending bonanza as a boon for the working class. He’s also attempting to downplay the costs as only falling on the uber-wealthy and big corporations.
“[Struggling Americans] can’t afford child care,” Sanders said at a recent event in Cedar Rapids, Iowa. “They can’t afford health care. They can’t afford to send their kids to college. They can’t afford housing. And they look around and ask, ‘Does anybody care about me?’”
The senator dubbed the multi-trillion-dollar spending plans “the most consequential piece of legislation for working families that we have seen in this country since the New Deal.”
At a similar event in Indiana, Sanders gloated about his intent to raise taxes, but claimed he would only do so on “the rich.”
“My Republican colleagues are busy telling everybody, ‘Bernie Sanders and Democrats are going to raise taxes.’ You’re right!” Sanders said. “We’re gonna raise them on the richest people in this country so they start paying their fair share.”
There’s just one problem with this whole narrative: it’s impossible. The exorbitant levels of spending Sanders and his allies have proposed can not be financed by simply taking from the ultra-wealthy.
Indeed, as the Wall Street Journal editorial board wryly explains, you could confiscate the entire net worth of all US billionaires and still not raise enough money to fund Sanders’ plans.
“There are 724 [billionaires] in the U.S., according to the 2021 Forbes billionaires list, released in April,” the Journal reports. “At that point their collective net worth was $4.4 trillion, although that figure has presumably since risen along with the stock market.”
But when accounting for future renewals, the true cost of Sanders’ schemes, according to the Committee for a Responsible Federal Budget, is closer to $5.5 trillion—at least a trillion more than could be raised from billionaires. (And that’s assuming that taking their entire net worth is on the table; it most certainly is not).
“If Mr. Sanders were to confiscate every asset of every American billionaire— Jeff Bezos’s rockets; Elon Musk’s bitcoin; Larry Ellison’s boats; Oprah Winfrey’s houses; Ted Turner’s ranches; Jay-Z’s car collection; even the starched shirt off the back of poor Larry Fink, who tied for last place on the Forbes list, at $1 billion—it still wouldn’t cover the cost of Democrats’ next two legislative plans,” the Journal concludes.
And Sanders also wants to pay for the spending by raising taxes on corporations. But these taxes are, in reality, just taxes on workers. A Heritage Foundation study found that raising the corporate tax from 21 percent to 28 percent would lead to a $1,650 decline in average household income.
Moreover, Congress would likely finance much of the spending bonanza by simply running up the $28.7 trillion (and counting!) national debt. Rising debt directly hurts all Americans, not just the rich. It does so by slowing economic growth, reducing business investment into the economy, and requiring more taxes each year to cover interest payments.
Another way the spending plan may be financed is through the printing of new money. This contributes to price inflation. Rising prices are basically a regressive tax on the working class that erodes their purchasing power and savings.