It’s mind boggling to try to fathom the amount of money and the gargantuan debt expenditure contained in this $3.5 trillion bill emanating from the socialist mind of Senator Bernie Sanders. Most worrisome is that this bill would remake our form of government and way of life.
I turn to a couple of basic economic principles with which we are all familiar. The law of supply and demand coupled with the ingenuity and creativity of the free market. There’s simply never been a better economic system devised. It has lifted millions out of poverty while also blessing America with the strongest and most resilient economy in history.
It is based upon a basic but powerful economic concept: the selling of goods and services, done at arms-length, at a price agreeable to both parties. What each party is willing to agree to becomes the “market.” Therefore, the market sets the price. If the price is too high the consumer will no longer purchase the product or service; too low and the producer will likely go out of business. The meeting point is what both the customer and the seller can live with—a “meeting of the minds” in the context of economic freedom. This basic transaction occurs millions of times every day in America and has created enormous wealth in our country.
Why is this free-market model the best ever devised? Because it takes into account each of our basic self-interest. If I’m a shopper and you are Brookshires Grocery Store, my self-interest involves the need to obtain food for my family; Brookshires’ self-interest involves wanting to make a profit. This principle is underscored by the economist, Adam Smith, who formulated the Invisible Hand Theory, the crux of which is this: a great public good is derived when individuals act in their own self-interest on a level playing field created and maintained by the equal application of the laws to all.
With this in mind, let’s turn back to Bernie’s dream of a Socialist utopia. Socialism completely ignores these principles and entirely distorts the free market. That’s why we’ve seen Socialism (and Communism, its evil progenitor) ultimately fail every time it has been attempted. The result of Socialism in other countries is government control of business and industry, very high taxes and interest rates—discouraging entrepreneurs from taking a risk of starting a business because the cost of capital (i.e., investment dollars) is so high, very high unemployment, inflation, and a gutting of gross domestic product.
Bernie has stated many times “we need structural reforms to improve the lives of U.S. families.” I agree but our view of what structural reform means is dramatically different. To him it means federal funding—with exorbitant, permanent taxes including on the middle class—and federal government control resulting in everything being “free” with no real accountability.
[An aside: Sanders points to countries like Sweden, Norway, Finland, and Denmark (and ignores places like Venezuela) as examples of Socialism “working” but he draws a false equivalence regarding this Nordic model, and he obscures. These two strains of “Socialism” are often confused unless we distinguish them: the type in which government takes control and/or ownership of businesses, including goods and services, versus the entitlement-welfare state in which government purports to provide a social safety net based upon high taxes and huge government spending.
The “control-ownership” type is the true Socialism of the former USSR and Nazi Party (National-Socialist German Workers’ Party). However, Sweden, Norway, Finland, and Denmark are “entitlement-welfare” states and none of them have staked their form of government and the strength of their country on the economic freedoms and free market system as we have. In fact, some have argued that Denmark, for example, is not even a genuinely Socialist nation. (Center for Political Studies (CEPOS). We should note that in the Heritage Foundation’s Index of Economic Freedom, Denmark (ranked 12th out of 180 countries) ranks higher than the U.S. (18th).]
In our country, this bill means the Green New Deal which would kill the fossil fuel (oil and gas) industry, massive expansion of the welfare state, gun control, climate change funding, permanently open borders and providing amnesty to illegal aliens, defunding the police, and forcing Critical Race Theory (a re-segregation of our society based solely upon race) upon American school children, among many other unattainable but destructive goals. The result of this remake of the American economy and the American way of life would result in crushing taxation, onerous regulation causing high inflation, escalating prices and levels of national debt that would bankrupt our country.
Conversely, the smartest and most economically beneficial way to implement “structural reform” is by cutting taxes and reducing regulation in the way the Trump tax cuts caused the economy to explode—including the lowest unemployment in American history. The unemployment rate fell to 3.5% by the end of 2019, the lowest level in 50 years. The unemployment rate for black Americans dropped to 5.4%, the lowest level on record. The unemployment rate for Hispanic Americans fell to 3.9%, also the lowest level on record. A broad, strong national economy is unquestionably the best way to successfully introduce these reforms because it necessarily brings everybody into it who wishes to participate in the workforce.
Perhaps the greatest fallacy in Mr. Sanders’ argument is that, while he regularly rails against “wealth inequality” and “stagnant wages of workers,” the median household income grew by 9.2.% between 2016-2019, while 6.6 million were lifted from poverty and wages grew fastest for workers at the low end of the workforce! He also won’t directly address the fact that, during this same period, the real wealth held by the bottom 50% of households rose three times as fast as wealth held by the top 1%.
If this becomes law we will, in our lifetimes, see our way of life fatally wounded. Our free-market economy would bleed and shrink drastically, while the size and scope of government would expand beyond recognition. The new entitlements would never end. Once created a program develops a constituency and elected officials, who depend upon that constituency for votes, never repeal the benefit. The program, and its costs, last forever.
These are the core questions: Should Americans defer to government, or should government defer to us and serve us and our best interest as we direct our elected representatives to act on our behalf?
Should we preserve and protect the limited government bequeathed to us by our Founders, a government with specific, enumerated powers that governs only by the consent of the governed—that would be us, the American Citizens referred to at the beginning of the Constitution as “We the People”—or should we adopt the socialist model we’ve seen fail in so many places?
Do we still believe we know best how to run—and are better at running—our own, our families and our children’s lives, or do we think it best and wise to give away those precious and hard-fought-for rights of self-determination, won in bloody battles on land, sea and in the air, to government bureaucrats and social engineers and the ever-encroaching tentacles of the nanny, fascist, cancel culture state that seeks nothing less than absolute power over our lives and families and decisions.
Why would we allow the theft of our rare economic and social freedoms, which include our precious individual liberty and individual right of self-determination? Why would we allow our country—the envy of the world and still considered by much of the world to be that “shining city on the hill”—to be permanently altered and weakened? We simply cannot if we want America to remain America.