Tuesday, 18 September 2018

Ocasio-Cortez Wants to Spend $40 Trillion — But Has No Plan to Raise It

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Democratic congressional candidate Alexandria Ocasio-Cortez is, as befits a member of the Democratic Socialists of America, promising to enact a smorgasbord of welfare-state programs that even sympathetic think tanks estimate will cost $40 trillion over the next 10 years. Ocasio-Cortez, however, seems to have no strategy for bringing that vast sum into the U.S. Treasury.

On CNN’s State of the Union Sunday, host Jake Tapper asked Ocasio-Cortez, who is seeking to represent New York’s 14th District, about the discrepancy between her lavish spending desires and her paltry plans for raising the cash to fund them.

“Your platform has called for various new programs including Medicare for All, housing as a federal right, a federal jobs guarantee, tuition-free public college, canceling all student loan debt,” said Tapper. “According to nonpartisan and left-leaning studies friendly to your cause…, the overall price tag is more than $40 trillion in the next decade. You recently said in an interview that increasing taxes on the very wealthy plus an increased corporate tax rate would make $2 trillion over the next ten years, so where is the other $38 trillion going to come from?”

“Medicare for All,” Ocasio-Cortez replied, “would save the American people a very large amount of money.”

In fact, a study of Senator Bernie Sanders’ (I-Vt.) similar plan by the Mercatus Center at George Mason University found that the only way Medicare for All would save money is if it dramatically cut healthcare providers’ reimbursements, negotiated very low prescription-drug prices, and significantly reduced administrative costs, none of which is likely. Change those assumptions to reflect reality a bit more, and the plan ends up increasing national healthcare expenditures by over $3 trillion.

Ocasio-Cortez went on to extol the virtues of single-payer health insurance, saying, “These systems are not just pie-in-the-sky. Many of them are accomplished by every modern, civilized democracy in the western world.” In other words, since all the cool kids have socialized medicine, so should the United States — never mind the fact that those systems are fraught with cost overruns; long waits for treatment; rationing of care, including euthanizing the old and infirm; and even denying parents of dying babies the chance to seek care elsewhere. Model welfare state Sweden’s single-payer plan is in such bad shape that people are buying private health insurance to obtain the care they are allegedly guaranteed by the government.

Although Tapper didn’t take issue with any of Ocasio-Cortez’s contentions — indeed, he seemed to endorse them — he wasn’t satisfied with her non-answer, so he pressed her for more specifics. “I am talking about the overall package,” he said. “You say it’s not pie-in-the-sky, but $40 trillion is quite a bit of money. And the taxes that you talked about raising to pay for this, to pay for your agenda, only count for two.”

The candidate returned to her talking points about how Medicare for All would supposedly save money, recounting how last year she asked her restaurant coworkers how many of them had health insurance, and not one of them did because it cost too much. That, of course, was under ObamaCare, which itself was an attempt to legislate away high healthcare costs that other government interventions had created.

“Additionally, what this is, it’s a broader agenda,” continued Ocasio-Cortez. “We do know and acknowledge that there are political realities. They don’t always happen with just the wave of a wand but we can work to make these things happen. In fact, when you look at the economic activity that it spurs — for example, if you look at my generation, millennials, the amount of economic activity that we do not engage in. The fact that we delay purchasing homes, that we don’t participate in the economy in purchasing cars, etc., as fully as possible is a cost. It is an externality, if you will, of unprecedented amount of student loan debt.” (Federal student loans, by the way, are another program of the sort that Ocasio-Cortez endorses.)

Sensing he wasn’t getting anywhere with this line of questioning, Tapper said, “I’m assuming I’m not going to get an answer for the other $38 trillion, but we’ll have you back and maybe we can go over that.”

Good luck, Jake.

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