What’s wrong with Bernienomics?

By now it will come as no surprise to anyone that I am an enthusiastic and vocal supporter of Bernie Sanders’ candidacy. But rather than putting up yet another pro-Bernie post, I’d like to put a discussion topic out there for everyone’s consideration.

 

The estimated combined annual cost of Sanders’ single-payer health care plan and his tuition-free college plan is, by any estimation, substantial. Between the two, it’s about one and a half trillion dollars. (!)

 

But let’s compare that against current expenditures. The 2015 federal budget, between mandatory and discretionary spending, provides for just over a trillion in Medicare and health spending, and a further fifty billion in tertiary education (college-level) spending.

 

So we’re already spending 70% of what Sanders is proposing.

 

Sanders further proposes to levy a tax of “a fraction of a percent” on Wall Street speculation, which he believes would bring in revenue of seventy-five billion. A fraction of a percent doesn’t seem unduly onerous to me, and that gets us to 75% of goal.

 

What he suggests in order to defray the health care costs are a personal income-based tax of 2.2%, which is substantially less than most households currently pay for insurance, deductibles and the like, and a business tax of 6.2% of the employees’ income – again, substantially lower than what most employers are currently paying to their benefits providers. These two tax increases are estimated to generate eight hundred and thirty billion dollars in revenue.

 

That brings us to 130% of that goal – fully paid for and then some, and saves money for businesses, workers and students alike into the bargain. That seems pretty good to me, and the benefit of a healthier and better-educated populace seems like an obvious choice at that point.

 

Sooooo… since I will admit that I am by no means an economist, I would like to see a conversation *WITHOUT partisan rhetoric, please*, in which someone explains to me why this scenario is apparently so undesirable to so many.

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Of blanketeering governors and economic collapse

Everyone remembers Client #9. The news story was almost as widespread as that “Love Potion #9” song, though there appears to be no connection.

Eliot Spitzer was governor of New York. Elected in 2006 by a comfortable margin, he came in promising reform and decency, then resigned in disgrace after a hooker blew his job. Partial credit there, Eliot.

In more detail, Spitzer failed at decency when he was caught out in a sting operation as a client of a highly paid call girl with eyes so close together that her nose had to get in the way as a referee.

The ensuing scandal brought Spitzer low, as many will remember.

BUT.

He is hardly the first public official to have – and indeed admit to – such indiscretions. The vast majority of these have kept their jobs and indeed continue to serve, sometimes admirably. The sexual peccadilloes of the governing elite are not indicative of their ability to do their jobs, after all.

So what made Eliot special?

As attorney general, Spitzer had done a great deal of good, going after big corporations with practices that hurt the little guy.

Poor phrasing there, I apologize.

As attorney general, Spitzer had done a great deal of good, going after big corporations with practices that hurt their customers and smaller competitors.

On February 14 2008, the Washington Post ran an Spitzer editorial titled, “Predatory Lenders’ Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers”. In this article, he detailed the federal derailment of his own investigations into the crisis back in 2003.

About two weeks later, he Spitzer proposed legislation which would have imposed penalties for mortgage fraud and predatory lending practices.

Needless to say, he was making himself few friends in the White House or on Wall Street. In a curious parallel (and by curious I mean blatant) his case was dealt with in DC instead of being referred to state authorities, and the first voices howling for impeachment belonged to downstate Republican members of the state legislature.

Had Spitzer been allowed to continue on his path, either in 2003 or 2008, the economic situation might have been significantly different.

Regrettably, his blanketeering gave opponents just the opening they needed in order to bring him down.

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New potentially-trendy drink: the Bailout

Begin with 7 oz. of 7-Up, for the 2007 profits shown on most balance sheets. 

Pour it “on the rocks” to symbolize the underlying instability.

Add a shot of Cuervo Gold tequila, representing the golden parachutes handed out to executives.

Add a shot of Triple Sec, for the Secretary of the Treasury, the Secretary of Commerce, and the secretary who just got laid off.

Splash in raspberry cordial like so much spilled red ink, and a squeeze of lemon to leave a sour taste in your mouth.

Drink it as fast as you can and ask for more.

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