The United States is not a socialistOpens a New Window. country today. That is so because of our vibrant private sectorOpens a New Window.. If some of the Democratic presidential hopefuls truly had their way, however, they would bring socialism into clear view.
Since they started actively campaigning in January to become the Democratic nominee for president, the Democrats have been in a bidding warOpens a New Window. to widen the scope of government – dramatically. They are led in that regard by Elizabeth Warren, who won’t get the nomination, but whose bigger-government proposals the other candidates are almost forced to match.
While the others have not gone that far, most of them support a huge expansion of government spending in the form of Medicare-for-all. That proposal alone would add an estimated $3.2 trillion a year to the federal budget, which is already projected to reach $4.76 trillion in 2020. Combined that would equal $7.9 trillion in yearly spending. The Democrats’ proposals on no-fee education, childcare and the like would be on top of that.
Most people don’t think that spending will occur. Then again, few thought that when Ronald Reagan said, in January of 1981, “In this present crisis, government is not the solution to our problem; government is the problem,” that annual federal spending would reach $5 trillion, as it has today. After all, federal expenditures were a quaint $590 billion in 1980.
This is not just an academic question. Medicare-for-all spending would drive the government spending percentage of the economy up from 38 percent to around 50 percent. It would also require enormous new tax revenues for over a decade that even the robust economy could not provide. This would result in even more massive deficit spending than we have today.
Of course, if the far-left Democrats had their way, in addition to massive spending increases, there would be massive tax rate increases and new regulations. All of those increases (taxes, spending regulations and deficits) would return our economic growth rates to below 2 percent – about the average rate we saw for the eight years of the Obama presidency – if not worse.
During the Obama years, we saw a dramatic increase in government dependence. For instance, the low growth rates, under Obama, saw an explosion in those obtaining Social Security disability benefits. Increased government dependency, in turn, means fewer people paying taxes, more government spending and an overall spiraling down economic effect.
We need only to look to the European Union – a collection of semi-socialist and socialist states – as a warning. Low growth rates are the hallmark of the European Union. EU growth has been 0 percent for twenty years and it is no coincidence that, as a percentage of GDP, government spending is above 50 percent.
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