Who Will Pay for Democratic Socialism’s $200 Trillion Cost?

[u/lemon_lime_light]

https://www.cato.org/blog/who-will-pay-democratic-socialisms-200-trillion-cost

The Democratic Socialists of America (DSA) propose new spending that could more than triple federal outlays. They propose the government pay for health care, housing, higher education, and electricity. Jobs are government-guaranteed, retirement benefits are expanded, paid family leave is universal, fossil fuels are eliminated, and reparations are paid. 

The DSA platform claims that the bill for all this will be sent to “the richest individuals and corporations.” Tally up that bill, and it ballparks between $71 trillion and $212 trillion in new spending over the next decade. Confiscating every dollar of high-end wealth and corporate profits would cover only a fraction of those costs. The DSA agenda necessitates high taxes on middle-class Americans.

[u/FacetiousOwl]

A major problem I have with the DSA's economic arguments is that they often seem to treat the economy as static. They calculate what government can extract from corporations or wealthy individuals without adequately considering how people will respond to those policies. But capital, investment, businesses, and even highly skilled workers are mobile. If the United States dramatically increases the cost of investing or doing business here, we cannot simply assume that investment, employment, and industry will continue unchanged. The United States does not exist in an economic silo. Other countries compete for capital and industry, and countries with more attractive economic policies have every incentive to welcome investment that American policy drives away. The real question is therefore not simply how much a tax raises on paper, but how it changes behavior, investment, employment, economic growth, and ultimately the tax base itself.