Bernie Sanders’ economic plan

Good piece.

But the critics are missing the big picture, which is simple: The United States economy currently spends 17.1 percent of GDP on healthcare, while the UK, Australia, Canada, Germany, Japan, and France spend between 9.1 and 11.7 percent, respectively. All of these countries perform better than the United States, according to standard public-health measures such as average life expectancy. Within the context of the current US economy, the difference between spending 10 versus 17 percent of GDP on healthcare amounts to $1.3 trillion. That $1.3 trillion mark-up in US healthcare spending flows mainly into the coffers of big insurance and pharmaceutical companies. Do Sanders’s critics truly believe that it is impossible to devise a system whose administrative features roughly approximate those in Germany, Japan, the UK, France, Australia, or Canada? They have not advanced any serious arguments to support such a claim. Indeed, many of Sanders’s critics themselves have been proponents of single-payer prior to Sanders’s having incorporated it into his platform.

In a recent study that I co-authored with James Heintz and Thomas Herndon, we estimated that the Inclusive Prosperity Act could generate around $300 billion per year in new federal tax revenues (amounting to 1.7 percent of US GDP). This is after allowing that Wall Street trading would decline by an implausibly large 50 percent due to the tax. The Sanders campaign has estimated the cost of his free-college-tuition program at $75 billion per year. The $300 billion per year from the Wall Street tax could therefore cover this college-tuition program in full four times over. The Wall Street tax revenues could then provide something like another $225 billion to finance, for example, public investments in clean energy and infrastructure. Channeling this amount of money out of Wall Street and into education, clean energy, and infrastructure investments would, in turn, generate millions of middle-class jobs for educators as well as manufacturing and construction workers, as well as related support industries, rather than a relatively small number of high-paying Wall Street jobs. …

Rather, as my co-authors and I show, our revenue estimate at $300 billion per year corresponds with the experiences of other countries that currently operate with this type of tax, including the UK, France, Italy, Hong Kong, and Taiwan. …

In short, if something like a Sanders program is enacted in the United States, the critical point will not be whether GDP grows, on average, at 3 percent, 4 percent or 5.3 percent. A Sanders economy will be fully capable of growing at healthy rates. But more than just growing, a Sanders economy will also deliver standards of well-being for the overwhelming majority of Americans, as well as the environment, in ways that we have not experienced for generations.

Bernie Sanders Will Make the Economy Great Again