Brutal: Examining Ocasio-Cortez's Painful Answer on Funding Her Socialist Utopia

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Posted: Jul 30, 2018 10:20 AM
Brutal: Examining Ocasio-Cortez's Painful Answer on Funding Her Socialist Utopia

As we flagged on Friday, media sensation and instant lefty icon Alexandria Ocasio Cortez appeared on the Daily Show last week, where she was confronted with a relatively simple question by host Trevor Noah.  Ocasio Cortez is campaigning on a laundry list of new government programs and entitlements, including "Medicare for All," free college, and a "universal jobs guarantee."  But how does she intend to pay for for this calorie-exploding buffet of government largesse?  Her response to that fundamental challenge was a bit of a jumbled mess, to put it rather mildly:  


After muttering some words about "back of the envelope" calculations and touting a discussion with a Nobel Prize-winning economist, she exclaimed that if wealthy people and corporations would just pay their "fair share," her dreams could become realities.  What was remarkable about her answer was not that she deployed standard-issue Democratic talking points invoking Warren Buffett's secretary; you could abruptly wake virtually any left-of-center political figure from a deep sleep and quiz them about long term federal debt, and he or she would groggily start mumbling and "fairness."  No, what was most interesting about AOC's reply was how simultaneously honest and incoherent it was.  She proposes "reversing" the tax reform law, which would result in a $2 trillion tax increase on families and businesses.  The economy is booming in large measure because job creators have finally been afforded precious certainty, and because America's grossly uncompetitive corporate tax rates were made much more competitive.  Meanwhile, millions of Americans are feeling better about their economic conditions because they have more disposable income, thanks to an across-the-board lowering of the federal tax burden, across all income groups.  AOC wants to undo that progress and apply the additional revenue toward government programs.  

But as she freely admits, this policy about-face would only generate about $2 trillion over a decade.  How much would a single-payer healthcare scheme cost?  According to a rigorous study by a left-leaning think tank, the ten-year price tag would be $32 trillion, or approximately $3.2 trillion per year (as a point of comparison, the federal government spent roughly $4 trillion last year, in total.  Repealing the pro-growth GOP tax law would pay for less than ten percent of what is needed for just one of her many agenda items.  How might she fill this $30 trillion hole -- a number that would further explode as she moved on to her other plans?  Details are sketchy, but she does mention that a carbon tax could squeeze taxpayers for "a large amount of revenue that we could have."  Taxes on energy are regressive, disproportionately hurting low income Americans, who would feel the pinch of higher energy costs most acutely.  They're also quite unpopular, as Democrats in California are learning in the wake of their imposition of a statewide gas tax.  But even a fairly broad carbon tax would only extract a little over $1 trillion in a ten-year window, according to estimates.  How else might the gaping shortfall be filled?  Ocasio Cortez goes on to raise the idea of cutting defense spending, butchering a statistic, and making a false assertion in the process:


Let's set aside her giant mistake and incorrect framing for the moment.  Let's also concede that there is certainly waste, duplication, inefficiencies and pork that could be trimmed from the military budget.  The fact remains that national defense -- an actual, core constitutional imperative of the federal government -- already costs far less than Social Security, Medicare and Medicaid.  For instance, last year, Uncle Sam spent $590 billion on defense, compared to nearly $2 trillion on the aforementioned three entitlements behemoths.  And those programs are speeding toward insolvency, as reported by nonpartisan government bookkeepers.  Ocasio Cortez's idea is to reduce spending on the military...in order to vastly expand already-troubled healthcare and retirement programs.  The math doesn't even come close to adding up.  Defenders of Cortez's socialist vision have responded to these inconvenient realities by contending that other western nations manage to pull of government-run healthcare, so we make it work -- or by flatly stating that specifics aside, we'll somehow find a way to finance the scheme:


It "got paid for" with borrowed money.  And the cost of multi-trillion-dollar wars still pale in comparison to the ongoing and open-ended costs of national healthcare.  In case people haven't noticed, our national debt keeps climbing higher.  We didn't "find" money to pay for other priorities; we just racked up enormous charges on the national credit card.  We did so while doling out tens of trillions in unpaid-for promises of future benefits.  This is incredibly reckless; it's most certainly not a convincing justification for additional recklessness.  And while it's true that other nations offer government-provided healthcare, those countries pay for those programs by levying much, much higher taxes on their citizens than Americans are accustomed to (often for worse outcomes, less access to timely care, and far less life-saving medical innovation).  Is that a trade off Democrats are willing to sell openly and honestly?  Remember, they ferociously attacked the recent tax cuts by inaccurately pretending that they wouldn't benefit the middle class.  Post-passage, they've shifted to talking about undoing the tax relief except for the middle class tax cuts, the existence of which they finally admit.  These tactics and rhetorical gambits demonstrate the political toxicity of alienating middle income Americans.  

But in order to even come close to paying for government healthcare (let alone "free" college and the rest of it), bruising tax hikes on working and middle class voters would be an unavoidable necessity, as some Democrats have been forced to acknowledge.  Those are the real "back of the envelope" facts that no conversations with Nobel economists, and no amount of bleating about "fair shares," can erase.  Ocasio Cortez told the Daily Show audience that pushing for these exorbitantly expensive new programs will require "political and moral courage."  But engaging in such self-congratulation while failing to level with voters about what your "courage" will actually cost them belies ignorance, at best -- and deceitful cowardice, at worst.