The Economic Consequences of Socialism

Anyone who has been watching the presidential race heat up has probably heard a few of Bernie Sanders ideas for our great Republic. He’s using all the quiet cunning of a snake oil salesman to wrap up the idea of socialism and present it to our youth and young adults like a gift tailor made to solve all their current problems and many of the ills of the world. Unfortunately, he’s not sharing the actual price tag of these gifts he’d like to bestow upon the American people.

The problem with all the campaign promises Bernie Sanders is making is that these things aren’t free. In fact, the Tax Policy Center took a nice long look at the tax plans presented by all candidates in the upcoming election and discovered that the Bernie Sanders plan carries a $15.3 trillion dollar price tag over the next decade.

While it’s true that the highest earners will bear the brunt of the costs of these new taxes, the pain doesn’t end there. Under his tax plan, middle and even low income families will pay new taxes on money they earn from work, the money they save, and the money they invest. In fact, middle income earners will pay approximately 8.5 percent more in taxes under the Sanders plan. In other words, his plan will force middle income families to make painful choices about whether the new programs Sanders is recommending are worth the added taxes that come as part of the package.

The real shocker though, is that the Sanders tax plan, according to Slant News, makes no changes to top tax rates for corporations, leaving a loophole in place for those interested in accumulating wealth without paying the substantial price wealth brings under the Bernie Sanders plan.

Beyond the costs to the American people, the tax proposal offers no solutions for paying down the national debt which is accruing interest at the alarming rate of $73.9 million dollars each day. That’s well over three million dollars per hour, which is more than double what the average American will earn in a lifetime – per hour. The numbers are staggering and his plan pushes us further into debt without addressing the debt problem at all.

Then there is the world view. For those who aren’t aware there are many socialistic societies around the world. The countries that have truly socialistic economies, including: China, Cuba, and North Korea, according to Investopedia, assumes public ownership of production. In this type of economy goods are produced according to their usage value. The usage value is determined by the needs of society and, as such, would prevent under or over production – in a perfect world. Unfortunately, the world isn’t perfect. There is corruption, natural disasters, population fluctuations, and any number of mitigating factors that can render the predicted production needs useless.

The goal of socialism is to reduce the gap between the wealthy and the poor by redistributing wealth. Private ownership is discouraged along with innovation and the accumulation of wealth under this type of economic system of government. In today’s society, the governments that most closely resemble socialist governments are all in varying states of economic ruin.

Cuba and China have both made subtle shifts with Cuba introducing new economic policies in the last few years and China making the move to become more of a market economy rather than a purely socialist economy but not quite embracing the idea of capitalism.

North Korea has been reluctant to change and continues to suffer from famine, a crumbling infrastructure, and a lack of manufacturing structure making it difficult to recover and advance.

At the end of the day, the U.S. cannot afford to embrace the idea of socialism more than it already has without crippling small businesses and broadening government dependency on basic human needs such as education, medicine, and, to a larger degree than most people realize, jobs. To put it succinctly, we can’t afford the economic consequences of socialism, we can’t afford the socialistic policies we already have in place, much less to take on more.


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