What would be the impact of democratic socialism on America?
Those of us who’ve studied history know socialism does not work, but Bernie Sanders and Elizabeth Warren fans believe it just has never been done right. Enter the idea of democratic socialism and the progressives’ master plan to scrap the entire American experiment–campaign on the promise of free stuff. Free healthcare, free education, free childcare…to the progressive, everything can be free if only it garners them votes to acquire power. In today’s episode, I will highlight three key areas where democratic socialism is doomed to fail and arm you, my listener, with key talking points to combat the progressive onslaught of nonsense.
I am writing today’s episode on the day of the South Carolina Primary and three days before super Tuesday. As of right now, Bernie Sanders has momentum nationally, Joe Biden has the edge in South Carolina, and Mike Bloomberg is trending high for Super Tuesday…however, Bernie is predicted to carry more delegates from super Tuesday. I share this information to highlight that today’s episode is not about Bernie Sanders or his political momentum, but rather an honest look at the issues being championed by those celebrating democratic socialism and the social ills they promise to cure.
First, let’s get some definitions out of the way:
- Baby Boomers are people born from 1946 to 1965
- Generation X are people born from 1966 to 1976
- Generation Y (millennials) are people born from 1977 to 1994
- Generation Z are people born from 1995 to 2012
These next definitions come straight from Wikipedia. I often receive complaints from people when I quote Wikipedia stats and they can not be trusted. I am not suggesting Wikipedia is the authority but is representative of the thought process for the vast majority of progressives. Wikipedia has a sophisticated error identification system and when information is changed and added on the website, then a human checks and/or corrects. Corrections always lean left and thus is fair for me to use to highlight the progressive thought process.
Democratic socialism is defined as having a socialist economy in which the means of production are socially and collectively owned or controlled, alongside a democratic political system of government. Democratic socialism rejects self-described socialist states just as it rejects Marxism–Leninism. As far as economics, the best description I could get from Wikipedia is: Democratic socialism is also committed to a decentralized form of economic planning where productive units are integrated into a single organization and organized on the basis of self-management.
Socialism is a political, social and economic philosophy encompassing a range of economic and social systems characterized by social ownership of the means of production and workers’ self-management of enterprises.
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Characteristics central to capitalism include private property, capital accumulation, wage labor, voluntary exchange, a price system, and competitive markets. In a capitalist market economy, decision-making and investments are determined by every owner of wealth, property or production ability in financial and capital markets, whereas prices and the distribution of goods and services are mainly determined by competition in goods and services markets.
Let me state again, I am not presenting Wikipedia as the authority on the definition of the above terms, but rather presenting what is obviously a left-leaning perspective for the purposes of supporting my thesis.
Out of fairness, I’ll state my thesis before I present the evidence. No other economic system has done more for humanity than capitalism. Prior to the American experiment, no other country had successfully implemented a liberty-based economic system of capitalism. Since the American experiment, several nations have tried variations on the capitalist idea, but all have a form of government control that restricts liberty and thus be classified by socialist or communist. Today’s episode is not meant to be a discussion on the pros or cons of various political ideologies. Today I am presenting the popular issues from two presidential candidates and highlight how, I feel, they would damage the American experiment and destroy Capitalism.
Ok, diving in head-first, let’s start with Bernie Sander and his idea for Corporate Accountability and Democracy. His website reads:
- Fundamentally shift the wealth of the economy back into the hands of the workers who create it.
- Give workers an ownership stake in the companies they work for.
- Break up corrupt corporate mergers and monopolies, including reviewing all mergers that have taken place during the Trump administration and institute new merger guidelines
- Finally, make corporations pay their fair share of taxes by reversing Trump’s corporate tax breaks and closing corporate tax loopholes to raise up to $3 trillion over 10-years.
Wikipedia states democratic socialists reject Marxism–Leninism. That means democratic socialists reject the authoritarian stance traditionally affiliated with socialist and communist systems. My first question is: Is it not authoritative to take ownership of those who invested in the company and give ownership to the workers? Would not the government have to take a position of absolute power to be granted such authority to force the ownership transition?
On paper, the idea sounds really noble. The workers create the product and then get cut out of sharing in the profits. CEO’s salaries are astronomical compared to the mail clerk and thus creates an unfair wage discrepancy.
Elizabeth Warren has an interesting twist on this same idea, her campaign website suggests: “Empowers workers at big American corporations to elect no less than 40% of the company’s board members”
Again, does not the federal government need to hold absolute power over business operations in order to enforce such a rule?
Both Bernie and Elizabeth support authoritarian positions and thus the first point out of the gate destroy their idea of democratic socialism. Need more evidence?
Here is another statement from Elizabeth’s website: “Removes bad financial incentives by restricting directors and senior executives at big corporations from selling company shares”. Shares in corporations are private assets, no different than a deed to a house or a pink slip for an automobile. If Elizabeth’s form of government holds the right to control one asset, I would suggest she would hold the ability to control all private ownership.
Here is a statement from Bernie’s website along the same lines: Establish federal protections against the firing of workers for any reason other than “just cause.” To adhere to this approach, every business would have to report all HR concerns to the federal government for approval for dismissal. Every employee who is fired would have an automatic right to appeal to the federal government. Is that not authoritarian?
OK, let’s look at another issue both Bernie and Elizabeth champion…taxing the very wealthy. Here is Elizabeth’s idea first:
The Ultra-Millionaire Tax taxes the wealth of the richest Americans. It applies only to households with a net worth of $50 million or more—roughly the wealthiest 75,000 households, or the top 0.1%. Households would pay an annual 2% tax on every dollar of net worth above $50 million and a 6% tax on every dollar of net worth above $1 billion. Because wealth is so concentrated, this small tax on roughly 75,000 households will bring in $3.75 trillion in revenue over a ten-year period.
Bernie has a very similar plan:
The tax rate would increase to 2 percent on net worth from $50 to $250 million, 3 percent from $250 to $500 million, 4 percent from $500 million to $1 billion, 5 percent from $1 to $2.5 billion, 6 percent from $2.5 to $5 billion, 7 percent from $5 to $10 billion, and 8 percent on wealth over $10 billion. These brackets are halved for singles.
There is an important note here that both taxes are on net worth. Keeping in the spirit of using Wikipedia for our definitions, here is what Wikipedia says about net worth:
Net worth is the value of all the non-financial and financial assets owned by an institutional unit or sector minus the value of all its outstanding liabilities.
This means both Bernie and Elizabeth will tax the entire portfolio of the uber-rich (regardless of liquidity.) For this to happen, the federal government would have to have complete access to all financial information. All bank accounts, investment portfolios, deeds, pink slips, a detailed inventory of all art, patents, and everything of value would fall under the jurisdiction of the federal government. It is interesting to note both Bernie and Elizabeth set the bottom cap on people with $50 million or more…they even campaign on just how few people would be affected by this tax, however, they both neglect to point out that ALL Americans would be monitored. Otherwise, how would the government know when your net worth exceeds $50 million? Every American would have to submit all of their financial data to the federal government for monitoring. Once you get rich enough to be taxed, then the government takes your money. I’d argue this is pretty authoritarian. Right?
Both Bernie and Elizabeth have very nice websites and they present a passionate argument for how they will help the poor, the homeless, and the common worker…all at the expense of the rich. They promise to fix healthcare, housing, and the American justice system. Their proposed budgets are noted in the trillions, not billions. The amount of money they democratic socialists are promising to spend exceed 50 to 60 trillion dollars. The entire US economy for 2018 was $20.58 trillion. Estimates for the 2020 economy are $22.32 trillion. Where is the other $27.68 trillion coming from?
One more issue to discuss before driving to the conclusion. Both Bernie and Elizabeth are promising to make college free and forgive current student debt. Here is Bernie’s position:
Cancel all student loan debt for the some 45 million Americans who owe about $1.6 trillion and place a cap on student loan interest rates going forward at 1.88 percent.
Here is Elizabeth’s slant on the issue:
I’ll direct the Secretary of Education to use their authority to begin to compromise and modify federal student loans consistent with my plan to cancel up to $50,000 in debt for 95% of student loan borrowers (about 42 million people).
Banks hold debt, guaranteed by the federal government (of course), but forgiving all the debt really means taking tax money to pay off the notes. I have a future podcast episode planned for discussing the cost of higher education in America, but the idea of paying off student loans is an economic discussion for today.
My question is about reparations for those of us who worked and paid off our student loans. Are we going to get reimbursed for the money we paid? Democratic socialists appear to argue everything on social fairness, why not argue that while paying off student loan debt that the federal government reimburses every American who paid off their student loans? Crazy idea? Or am I just asking questions that highlight the next step in the progressive plan to destroy capitalism and America as we know it?
At the core of democratic socialism is a position of anti-capitalism. Both Bernie and Elizabeth have gained popular support based on their free stuff campaign. So one must ask, are Gen Y’s and Z’s supporting socialism or are they being blinded by the notion of free stuff?
Social fairness, social justice, or social wellbeing are all code words for socialism. The trick of the dictator is to sell the utopian idea of the future. Let us not forget Hitler gained power by a popular vote for the life-altering benefits of socialism.
It is our job, as conservatives, to keep alive the notion of freedom and liberty. To fight socialism, we must stand loudly against the political correctness tactics of the progressives. Don’t fear family discussions about who you feel would best serve American ideals as President. Don’t allow the temptation of free handouts to sway the conversation, challenge the notion of the authoritative requirement to implement the progressive ideology. Force your debate challenger with the idea that to accomplish their goal, Bernie and Elizabeth must trample on the notion of freedom and liberty. Make them answer how they can accept handing over all private information and eliminate the idea of ownership? Make the progressive speak in favor of the obvious dictatorship they are proposing.
The most important thing to keep in mind during this process is changing the mind of a zealot is impossible, it is the mind of the listener that matters for the non-zealots outnumber the others by tenfold. Get the zealot to talk, force them to defend their position, and watch their support erode away.