The Real Math: Why Bernie Sanders’ Policies Actually Save America Money

health care costs

Conservative pundits have just asserted that Bernie Sanders’ policy proposals will cost America $18 trillion.  The Wall Street Journal tallies it up as $15 trillion for universal health care, $1.2 trillion for bolstered Social Security, $1 trillion for Sanders’ proposed building boom in new infrastructure, and $750 billion for tuition-free public higher education.  Since the conservative publication is obviously attempting to shock the reader, you must do a bit of digging to find that the hefty price tag occurs over a decade.  To put Sanders’ dream package of reforms in perspective, we are on track to spend $6.4 trillion on national defense alone over the next decade.

Therefore, while Sanders’ proposals are certainly not cheap, let’s not pretend that we don’t already spend hand-over-fist…and with little to show for it.  Has our defense spending pacified Iraq, Afghanistan, or brought Iran, Syria, or North Korea to heel?  When you factor in major defense spending scandals like the F-35 Joint Strike Fighter, $18 trillion for a guaranteed improvement in national productivity seems like a damn good deal.

Statistics and comparisons aside, the WSJ fails to mention that the $18 trillion in government spending would be counteracted, at least in part, by an increase in consumer spending.  While a small minority of taxpayers and firms would see tax increases to pay for Sanders’ reforms, the vast majority of American families would see a substantial increase in their disposable income.  Not having to pay out of pocket for primary health care and public higher education will promote a spending boom by working- and middle-class families.  They will purchase the goods and services made by those who are paying increased tax rates.

Additionally, the WSJ title implies that the $18 trillion is in addition to current government spending.  It does not report that much of the $18 trillion is already slated to be spent in existing, but similar, programs like Medicare, Medicaid, federal student loans, Pell grants, and existing plans to upgrade public infrastructure.  Bernie Sanders’ proposals actually cost much less additional dollars than $18 trillion.  Furthermore, it is not mentioned that, simultaneous with an increase in spending on social programs, a Bernie Sanders administration would save money by cutting spending on prisons, military projects, and corporate welfare.

The article also never mentions that much of the $18 trillion is being spent already…by struggling consumers.  Bernie Sanders simply wants to transfer much of this burden from mainstream consumers, whose real wages have fallen since the 1970s, to the top 0.1 percent of earners. This transfer of burden will result in a huge increase in consumer spending:  Without having to worry about their college tuition or student debt, public university graduates will be much quicker to purchase homes, new automobiles, electronics, and other durable goods.  Without having to suffer through illness and injury because they cannot afford treatment, workers will be able to get help and get back to work with their productivity restored.

The ability to send skilled, talented, and hardworking students to college and keep skilled, talented, and hardworking employees on the job will boost America’s productivity…probably by $18 trillion over ten years.  Bernie Sanders’ proposals may cost some money, but they guarantee substantial dividends.

Current money pits like defense spending and prisons do not create economic dividends, and could even be seen as sapping national productivity.  Dollar for dollar, defense spending is the worst way to create jobs and our system of mass incarceration only reinforces elevated unemployment rates and rampant recidivism.  We are spending vast sums of money in some of the worst ways possible.

Now, here’s where Sanders’ proposals really help America get ahead:  Buying new is less expensive, in the long run, than buying used.

Bernie Sanders wants to revamp two major U.S. markets:  Health care and higher education.  Currently, these two markets are extremely inefficient due to inelastic demand, high levels of government subsidies, lack of suitable substitutes, and high barriers to market entry.  The government, right now, is allowing prices to soar by subsidizing consumers and producers…but doing little to control producer spending.  We are trying to fix old, “used” systems by pouring in money.  It’s just not working.

If you allow the government to take control of public higher education, similar to what it has done in public K-12 education, you allow for the government to engage in quality control and cost control.  This, in effect, creates a “new” system that can learn from the mistakes of the old.  For example, higher education is currently subjected to very few regulations of academic quality.  As a result, schools churn out underprepared college graduates who are not prepared for the rigors of the work force.  Schools view students as consumers and, unwisely, inflate grades and allow these paying customers to graduate rather than demanding them to perform as students.  This “used” system will not fix itself and will only change when forced to by top-down reform.

The government has avoided doing anything thus far because it doesn’t want to look “socialist” by interfering with consumer and producer freedom.  It continues to pour in money, via subsidies and unlimited federal student loans, and turns a blind eye to the waste and inefficiency caused by “market competition” that encourages colleges and universities to build new sports stadiums, full-service food courts, luxurious gymnasiums, and penthouse suite dormitories.

Making public higher education more like public K-12 would limit academic freedom, but it would finally allow for cost control and quality control.  Students would be admitted and retained based on merit and performance, not ability to pay.  College professors and instructors would be expected to teach, not just research and write books.  Universities would be expected to accomplish X with Y funding, forcing cost control.  People will grumble, but the situation would ultimately work.  Say what you will, but it has worked for K-12 for decades.

Similarly, in health care you would see the same thing.  The government would be able to control for cost and quality by ensuring that physicians and other medical personnel provided X services, under Y conditions, for Z compensation.  While this would be more complex than turning public higher education into the next K-12, it is ultimately doable.  And, fortunately, the two would go hand-in-hand:  With tuition-free public higher education, you would likely see an increase in medical training and the supply of new doctors, nurses, and physician’s assistants.  This increase in supply, along with government cost controls, would likely lower the expected $15 trillion price tag of universal health care.

I am assuming that The Wall Street Journal got its hefty price tag by multiplying the number of projected consumers by current market prices.  Realistically, the cost of both higher education and health care would decline per consumer as government cost controls set in.  And, with government quality controls in place in higher education, the number of incoming students would decrease.  As a result, the $18 trillion price tag for the first decade of Bernie Sanders’ reforms will actually be substantially lower.

It ain’t cheap, but it works.  And it will save money in the long run, especially as Americans are able to deal with illness and injury immediately, when treatment is easier and cheaper.  Right now, many citizens who cannot afford primary care will eventually seek emergency care, which must legally be provided, for an exponentially greater cost.  Allowing a citizen to receive $250 worth of care today is far preferable to providing $5,000 worth of care three years later, when the problem is agonizing…and the citizen can no longer work.

The situation is analogous to spending more money on a new car today, but far, far less money in repair bills in future years.  By revamping health care, higher education, and public infrastructure, Sanders is giving America a new car for the new century.  It’s better to pay a little more now than to pay a lot more later, especially when our “market” economy would likely be doing even worse.

Bernie2016.

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Calvin Wolf

By day, Calvin Wolf is a high school social studies teacher. By night, he is a freelance writer and novelist, penning political thrillers and commentary on politics, education, economics, foreign policy, and culture. In the past, he's worked as a professional cartoonist and as a backpacking guide. He once stood between a mother bear and her cub and emerged unscathed!

3 thoughts on “The Real Math: Why Bernie Sanders’ Policies Actually Save America Money

  • September 16, 2015 at 3:57 am
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    In the 14th paragraph, you state “students will decrease”…is this what you intended to say? Please explain.

    With respect to your argument about K-12 working, I would point out that currently many school districts are facing deficits and having to make cuts due to a combination of mandates for Common Core and reduced tax revenues from the 08-09 recession.

    I would also like to point out that investing in infrastructure provides multiple benefits and stimulates the economy at large. It is a no brainer proving how stupid and/or partisan the Republicans are. First, the prevailing wages are substantial…in NY the current lowest is around $45/hr … providing disposable income and consumer spending; travel expenses are required for many such jobs, boosting the hotel & restaurant industries; it would stimulate all the industries that supply materials…thus providing more jobs, with everyone paying income taxes and increase consumer spending. In addition, bad roads increase vehicle maintenance, and re-designing roads for better traffic flow in congested urban areas reduces fuel costs. Besides road construction we should be looking at high speed rail, like Europe. Finally, it NEEDS to be done. The infrastructure of this country is crumbling..what are our choices, let it all rot?

    Finally: I have relative in state prison for repeated DWIs…granted he needed reform, but he told me just yesterday that the longer time you serve, the more “benefits” you get when you get out! He said he will be eligible for 1900$ a month social security dis-ability! How crazy is that!?!

  • Pingback: We’re All Bernie Sanders: A Look at The Radical Reforms We Have Come to Love | The Bern Report

  • September 17, 2015 at 1:23 pm
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    The Wall Street Journal’s (emphasize “Wall Street”) bogus scare tactic of trying to shock the electorate into not examining Bernie Sanders’s many fiscally sound proposals is roundly refuted in the article below.

    Share it on your web page to replace right-wing plutocratic fear-mongering with the facts.

    We always have to do this with the deluded Right, and we suppose that its tactic of misinformation won’t end tomorrow.

    So, get used to it, America, AND DON’T FALL FOR IT.

    (JdeCP)

    http://www.thenation.com/article/what-the-wall-street-journal-gets-totally-wrong-about-bernie-sanders-agenda/?utm_source=Sailthru&utm_medium=email&utm_campaign=New%20Campaign&utm_term=daily

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