A number of members of Congress, both old and new, have latched onto socialistic policy proposals that are gaining support both in Washington and around the country, and especially among some presidential candidates.
Such proposals as “Medicare For All,” the “Green New Deal,” ‘’Free Healthcare” and “Free College” sound good but what would they mean for the American economy and for the income of the average American family?
The Council of Economic Advisers has written a report titled “The Opportunity Costs of Socialism,” which gives some answers to that question.
The Council is an agency of the federal government established in 1946 within the Executive Office of the President of the United States to give the president advice on economic issues. The current chairman of the agency is Kevin Hassett.
The report gives a definition of socialism, touches on the history of that economic and political system and addresses current policies by self-declared socialists, such as Vermont Sen. Bernie Sanders, and other members of Congress and presidential candidates who support such policies.
The report notes that, “In assessing the effects of socialist policies, it is important to recognize that they provide little material incentive for production and innovation and, by distributing goods and services for ‘free,’ prevent prices from revealing economically important information about costs and consumer needs and wants.”
Researchers found that replacing U.S. policies with highly socialistic policies, such as Venezuela’s, would reduce real GDP (gross domestic product) at least 40 percent in the long run, or about $24,000 per year for the average person.
And if the United States taxed and regulated labor markets on the level of the Nordic countries (such as Sweden, Norway and Denmark), American families would be taxed $2,000 to $5,000 more per year.
In addition, living standards in Nordic countries are at least 15 percent lower than in the United States.
More specifically, “Medicare for All,” if financed through higher taxes, would mean the GDP would fall by 9 percent, or about $7,000 per person. Also, health-wise, it would reduce longevity.
If you’d like to read more about the costs of socialism in this country, you can find the entire 72 page report at https://www.whitehouse.gov/wp-content/uploads/2018/10/The-Opportunity-Costs-of-Socialism.pdf.
The Lake Charles AMerican Press