6-1-15 – Bernie Sanders: Apocalypto Economics Part 2 – Electric Boogaloo

by Chris Campion

Continuing from last week’s post regarding Bernie Sanders’ calls for abject lunacy, or, as he sees it, an economic “plan”, we’ll pick up where we left off with the good Senator Who’s Not Really From Vermont Else He Would Have Had to Hold Two Jobs to Keep the Roof Over His Head Like Real Vermonters Do:

Bernie’s off to the races:

Addressing Wealth and Income Inequality

Today the richest 400 Americans own more than $2.3 trillion in wealth, more than the bottom 150 million Americans combined. Meanwhile, nearly half of Americans have less than $10,000 in savings and have no idea how they will be able to retire with dignity.

But half of Americans pay no income tax.  That bottom 150 million pay zero in income taxes, which means the rest of us are paying for everything that they receive in terms of government benefits.  Everything.

“Owning” $2.3 trillion in wealth does not mean that 2.3 trillion is in a big box of gold coins in someone’s basement.  It means those dollars are invested, or in property, or in some active form that creates jobs.  How does a company raise money to build a new plant to build more widgets?  It issues stock.  Who buys that stock?  People expecting a return on the investment, naturally, but the people with money to invest – meaning they don’t want to throw it away.

Who benefits from that new plant being built?  The contractors who build it.  The people hired to staff it once it’s up and running.  The customers who buy the widgets.  The investors who bought stock, because if the company is successful, they will see returns on that investment in the stock price and/or dividends.

So, if owning so much wealth makes you a bad person – why does Bernie want to kill jobs by confiscating more of that money?  Does he not want contractors to have jobs building the plant?  What about their families?  How will little Jimmy go to baseball camp this summer if his electrician Dad doesn’t get the job roping the new plant everyone was talking about?

Wealth is not a pile of money, to be doled out by a aging hipster who tells everyone what he thinks about “fairness”.  Wealth is fungible, it is risked, and confiscation of wealth has historically lead to, just in the 20th century, around 100 million deaths.

We need real tax reform that makes the rich and profitable corporations begin to pay their fair share of taxes. It is absurd that in 1952 corporate income taxes provided 32 percent of federal revenue while in 2014 they provided 11 percent. 

It’s absurd that the US corporate tax rate is the highest of all the OECD countries. Taxes are a cost.  Increase costs, and you decrease the ability of the company to expand, hire more people, develop new products.  Y’know, run a business?  Would Bernie want to increase the taxes on a mom and pop shop?  If not, why not?  If it’s because it would make them less profitable, and maybe make the margins so slim that the company gets closer to operating in the red, then why would he think it’s OK to apply the same logic to corporations?  Just because corporations are bigger?

It is scandalous that major profitable corporations like General Electric, Verizon, Citigroup and JP Morgan have, in a given recent year, paid nothing in federal income taxes. 

It’s scandalous that Bernie is propagating lies.  To wit:

General Electric:  Not only do they actually pay corporate income taxes, but state and local taxes, too.  But they’re not required to disclose those amounts, and the “zero” payment in taxes was a claim made by analyzing financial statements, not by actual company disclosures.  Which they’re not required to make.

Verizon:  Funny, but VZW lists income tax on their financial statement.  Did Bernie miss that in his in-depth analysis of their finances?

CitiGroup:  Hmm.  They show $2.7 billion in taxes paid.  How could Bernie be wrong?

JP Morgan:  Income tax expense?  $7.63 billion.  Does Bernie need a math tutor?

It is fiscally irresponsible that the U.S. Treasury loses about $100 billion a year because corporations and the rich stash their profits in the Cayman Islands, Bermuda and other tax havens.

No.  It’s outrageous that dollars earned overseas – dollars risked, not just piles of money, they are what’s earned after risking them in investments of all kinds – cannot be repatriated without a huge tax penalty, which makes the return of such dollars less of a sane financial decision than, say, pulling a Joker and burning a couple hundred million in cash.

The US Treasury isn’t “losing” a thing.  The USG – through its policies and bureaucratic apparatus – create the conditions that corporations have to react to.  It’s not the other way around, even with billions spent in lobbying, just to mitigate the outrageous policies put into place by people who have absolutely zero experience in the real world, in work, in dollars, in risk.  None.  Zero.

Yet they think they have the right, the duty, and the power to tell us what’s good for us.

And think about this, Bernie, if you can wrap your wizened head around it – how much money is the sainted Treasury losing due to companies being less profitable because of the very same laws and regulations you put into place as a kind of punishment for creating jobs?

This must end. We need a tax system that is fair and progressive. Children should not go hungry in this country while profitable corporations and the wealthy avoid their tax responsibilities.

I agree.  It’s not fair.  It’s not fair that if I get a second job, I get taxed at an effectively higher rate, all because I’m willing to work for what I want.  It’s not fair that if you pay zero in income taxes, you still get to vote for politicians who sell the idea of raising taxes on the people who already pay all the taxes, in order to give the people paying no incomes taxes more stuff.  That doesn’t seem fair at all, does it?

We have a progressive tax structure already.  The more you earn, the more you pay.  Done.

Children do not go hungry “in this country”.  Instead, we have a widespread obesity problem among our poorest children.  Why?  Because the government is there to fix problems for us, that’s why.  Why is it that in the US, the poor are obese, but in, say, Sudan, the poor are starving?

And Bernie thinks the fix for the non-hungry is more re-distribution?  What’s he planning on re-distributing, Ho-Ho’s?

The next issue Bernie plans on failing to address:  Reversing Climate Change!

The United States must lead the world in reversing climate change and make certain that this planet is habitable for our children and grandchildren. 

We must?  Why?  Because you say so?  How can we make certain the planet is habitable if an asteroid hits it?  Will taxing the 1% at a higher rate fix that somehow?

We must transform our energy system away from fossil fuels and into energy efficiency and sustainable energies. 

So Bernie’s all for nuclear energy.  Got it.  Oh, not really?  Well, good luck powering your house, then, with solar, geo, and wind – and nothing else.

Millions of homes and buildings need to be weatherized, our transportation system needs to be energy-efficient and we need to greatly accelerate the progress we are already seeing in wind, solar, geothermal and other forms of sustainable energy. Transforming our energy system will not only protect the environment but create good-paying jobs.  

As has been noted, especially in Vermont, wind power does not seem to be helping the environment much, unless by “helping” you mean a ton of dead birds, denuded Green Mountains, and highly toxic solar panels distributed all over what are becoming the less Green Mountains.

Yep, that’s Progressivism in a nutshell – more of what you don’t need, at a higher expense, with more collateral damage.

Bernie’s next easy problem to solve:  Health Care!

Health Care for All

The United States remains the only major country on Earth that does not guarantee health care for all as a right.

The countries that do guarantee it as a “right” have some of the worst access to health care services, pay higher taxes to cover it, and their citizens frequently travel to the US to receive health care.  Making something a “right” does not make it cheap, ubiquitous, or practical.  Try making a “right” to diamonds, or space shuttles, or Eiffel towers.  How would that work out?

Secondly, every American had access to health insurance, in one form or another, prior to ACA.  So even as he touts the modest gains of the system we absolutely had to have to provide everyone with health insurance, we still have people with no health insurance (which largely consists of people who could sign up for, or qualify for a program, but fail to sign up).

But why do we still have uninsured?  Bernie voted for it.  Why didn’t he fix it?  Why the failure, Bernard, and why are you touting this failure out loud, unless you don’t want us to vote you in for SuperPresident of America, since you failed to fix what other countries have so obviously and easily fixed?  It’s so easy that Sweden did it, and they’re mostly known for, um, meatballs.

Despite the modest gains of the Affordable Care Act, 35 million Americans continue to lack health insurance, and many more are underinsured.

You could issue 350 million health insurance cards tomorrow and that does not guarantee one damn thing in terms of access to care or health outcomes, nor does it address costs – the two things the ACA was sold to the US as a fix for what ailed us.  Instead, we passed it, increased costs massively, especially for private insurance rates, and we didn’t cover everybody.

I’m no politician, but that looks like Epic Fail time, Bernard.  Go back to the drawing board on it and get back to me.

Yet we continue paying far more per capita for health care than any other nation. The United States must move toward a Medicare-for-All single-payer system.

Only in the fantasy land of BernieLand does he think that moving to an under-funded and going broke Medicare system, an insurance that many doctors routinely refuse to take because it does not reimburse them at cost, will fix health care in the United States.  Medicare is underfunded by $38 trillion.  Bernie’s “solution” is like dropping a big bag of gasoline onto an already-raging fire to put it out.  That approach only works if you are both massively and obscenely stupid.

Or, Bernie’s goal is simply more control over the lives of the proles he seems to want to command, in every aspect of their lives.  Then it’s a raging success!

Finally, Bernie wants to wave his magic re-distributive wand once again and make college free.

Making College Affordable for All

We live in a highly competitive global economy.

Thanks for the update, comrade.  Did you go to college to learn that?

If this country is to do well economically, we need to have the best-educated workforce in the world. Yet today many Americans cannot get a higher education, not because they are unqualified but because they simply cannot afford it.

Yet we have more people enrolled than ever in college.  There’s financial aid, loans, grants, available for any student to go to school.  I’ve worked at a college.  No one who was admitted was ever turned away because they could not “afford it”.

Millions of others who do graduate from college or graduate school are drowning in debt. According to the Consumer Financial Protection Bureau, the total amount of outstanding student loan debt in the United States has tripled in the last 10 years and has now reached $1.2 trillion.

That’s what happens when you subsidize colleges with guaranteed student loans.  There is zero incentive for the college to cut costs, and therefore reduce tuition increases, when you make it enormously easy through federally-guaranteed student loans for students to, well, take out loans!  Boom!  Everyone’s happy!

Oh, except the recent graduate who wonders now why colleges have such attractive dorms yet his degree in advanced waffle-making isn’t netting him six figures on Wall Street.

The United States must join many other countries in understanding that investing in our young people’s education is investing in the future of our nation. I will soon be introducing legislation to make tuition in public colleges and universities free and substantially lower interest rates on student loans.

The United States spends ka-zillions on pre-K through college, all of it either directly paid through taxes, or subsidized through both taxes and federal and state tuition assistance programs at the college level, yet we’re not “investing” enough.  Here’s an idea:  When colleges are building dorms with hi-tech lounges and swimming pools that look like resorts, it’s time to break open an economics book to understand what subsidies really do, and that’s essentially what federal student loans do:  Subsidize ridiculous spending which results in tuition rates that are triple the national inflation rate.

Hmmm.  One of these trends is not like the other.

Oh, and how does college become “free”?  Who now pays for the buildings, teachers, staff, hot tubs, and high-speed internet connections at the local U?  Fairies and unicorns?  Bernie doesn’t say how he’ll make college free, just that he’ll be introducing legislation that is entirely disconnected from economic reality.  Someone has to pay for everything, no matter how much it’s worth.

So, in short for Bernie, there’s a lot to re-distribute, and not enough time to re-distribute it all, so vote Bernie for President!

{ 5 comments… read them below or add one }

charlotte scot June 2, 2015 at 11:51 am

It is amazing how Democratic Socialist countries can have booming economies AND provide first rate health care, free college education, free day care and a multitude of other services which protect and show appreciation for the middle class, while the US, the wealthiest country in the world, does not have a booming economy, ranks 14th in education and, according to a report in the Commonwealth Report, ranks 11th in health care in a comparison with eleven other countries (England is #1). (We do rank first as the most expensive health care in the world and as the nation with the most expenditures for military.) I for one would rather have our country prepare for the future by providing good education, for example, rather than seeing 99% of our income be re-distributed to the top 1%

Reply

Mark Shepard June 6, 2015 at 3:37 am

“That’s what happens when you subsidize colleges with guaranteed student loans. There is zero incentive for the college to cut costs, and therefore reduce tuition increases, when you make it enormously easy through federally-guaranteed student loans for students to, well, take out loans! Boom! Everyone’s happy!”

Right on the money, Chris. Sectors that have access to easy taxpayer money have much higher inflation rates. The equation is simple. Items are sold for what people are willing to pay, plus whatever amount is donated. Subsidies do three things: raise the cost of the subsidized product, keep a bad idea alive longer, kill incentive to work toward better ideas.

Reply

Jim Bulmer June 6, 2015 at 12:40 pm

Bernie’s economic philosophy is quite straight forward – you work hard, earn your money, and I’ll take it thank you and redistribute it to “the little guy” whomever he may be. In your dreams, Bernie.

Reply

Charles Burnham June 8, 2015 at 9:24 pm

Thank you Chris Campion for your insight into this whacko. Why the people of Vermont keep electing him is way over my head. looking forward to Part 3 and 4. This guy needs all the exposure he can get by you! He will make a good foil for Hilly though.

Reply

Kathleen Angier June 8, 2015 at 9:40 pm

@ Chris Campion: What are you afraid of? Why don’t you promote the person you will support? This is a snarky site, instead of voicing knee-jerk fears, support what you do believe in, comrade.

Reply

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