The senator from Vermont has recently come out with a plan for the United States of America--the federal government will guarantee a job to every American worker “who wants or needs one” and will pay them $15 an hour plus healthcare benefits.
As you would expect, this is a hugely controversial plan. Who pays for it? What happens to the private sector? Will private businesses replace people with automation?
First of all, we cannot let ourselves fall prey to the historically uninformed. By this I mean we cannot let ourselves believe that consolidating great powers into the federal government is a good thing when, historically speaking, a powerful centralized government has been responsible for the death of millions under communist/socialist rule or the prolonging of the Great Depression with the implementation of Franklin D. Roosevelt’s National Recovery Act and Agricultural Adjustment Act. Both programs cut back production, forced wages above market level and devastated workers who need to work, according to the Cato Institute.
So let’s fast forward to 2018 where self-proclaimed Democratic Socialist Bernie Sanders is advocating for a national government program that will have a devastating effect on the economy of the United States.
According to the Levy Economic Institute, approximately 16 million Americans could possibly take part in a nationwide job guarantee program. The Cato Institute has done the math on this and has calculated that to pay millions of people a base pay of $15 an hour, the federal government would have to spend a total of $37,440 per worker annually. That means even more of your hard-earned money can be taken out to fund this.
Many people may not mind this, but when you consider the resources to start this, among other factors, the gross cost is up to 2.4 percent of GDP. To contextualize this, the total spending by the federal government spends approximately 21 percent of GDP, or $4.17 trillion dollars, in the fiscal year 2018. They spend 60 percent of this budget on social security, Medicare and Medicaid alone while Medicaid alone eats up two percent of GDP.
Another issue is the probable corruption. It is no secret that a large number of left-leaning politicians in the United States are beholden to unions and what Senator Sanders’ plan will inevitably do is provide a breeding ground for more power going to the unions that are already corrupt. Watch this video on Big Unions by PragerU for a more in-depth analysis.
The prospect of giving every adult a job that pays well is a very noble endeavor, however, as I have been explaining, it is a colossal and costly one. Under the Trump Administration, we continue to see unemployment levels drop, a 17-year high in economic confidence, a GDP increase of 3 percent, job creation, the Dow Jones reaching record highs and saved $8.1 billion by cutting government regulation of businesses. So, I ask you Senator Sanders’--do we really need to enact such drastic and risky economic policies?
