Tag Archives: Ocasio-Cortez

Should big government socialists take over the free enterprise system?

Alexandria Ocasio-Cortez has some ideas about proper economic policy
Alexandria Ocasio-Cortez has some ideas about proper economic policy

Why did so many people vote for communist regimes in the last hundred years? Communist leaders – who had no demonstrated achievements in economic policy – simply promised voters all sorts of free stuff, e.g. – a guaranteed job, free health care, paid retirement, etc. When the expected benefits didn’t appear, the communist leaders blamed others for their failures, and naturally, those others had to die.

Think that couldn’t happen here? Well, a lot of leading Democrats sure sound like communist leaders. Promising to confiscate legally-owned firearms. Promising to abolish private health insurance. Promising to nationalize private retirement accounts. And promising to replace our current energy industry with a new government-controlled green energy industry.

Let’s look at that last one: the new government-controlled energy industry.

The Federalist reports on the Green New Deal plan.

A number of Democratic Party presidential hopefuls — including Cory Booker, Kamala Harris, Elizabeth Warren, Kirsten Gillibrand, Julián Castro, and Beto O’Rourke, for starters — have already endorsed or expressed support for the “Green New Deal” (GND). Today, Rep. Alexandria Ocasio-Cortez and Sen. Edward J. Markey dropped details about her plan.

[…]While some of the specifics need to be ironed out, the plan’s authors assure that this “massive transformation of our society” needs some “clear goals and a timeline.” The timeline is ten years. Here are some of the goals:

  • Ban affordable energy. GND calls for the elimination of all fossil fuel energy production, the lifeblood of American industry and life, which includes not only all oil but also natural gas — one of the cheapest sources of American energy, and one of the reasons the United States has been able to lead the world in carbon-emissions reduction.

  • Eliminate nuclear energy. The GND also calls for eliminating all nuclear power, one of the only productive and somewhat affordable “clean” energy sources available to us, in 11 years. This move would purge around 20 percent of American energy production so you can rely on intermittent wind for your energy needs.

  • Eliminate 99 percent of cars. The authors state that the GND would like to replace every “combustion-engine vehicle” — trucks, airplanes, boats, and 99 percent of cars — within ten years. Charging stations for electric vehicles will be built “everywhere,” though how power plants will provide the energy needed to charge them is a mystery.

  • Gut and rebuild every building in America. Markey and Cortez want to “retrofit every building in America” with “state of the art energy efficiency.” I repeat, “every building in America.” That includes every home, factory, and apartment building, which will all need, for starters, to have their entire working heating and cooling systems ripped out and replaced with…well, with whatever technology Democrats are going invent in their committee hearings, I guess.

  • Eliminate air travel. GND calls for building out “highspeed rail at a scale where air travel stops becoming necessary.”

  • A government-guaranteed job. The bill promises the United States government will provide every single American with a job that includes a “family-sustaining wage, family and medical leave, vacations, and a pension.” You can imagine that those left in the private sector would be funding these through some unspecified “massive” taxation.

  • Free education for life. GND promises free college or trade schools for every American.

  • A salubrious diet. The GND promises the government will provide “healthy food” to every American.

  • A house. The GND promises that the government will provide, “safe, affordable, adequate housing” for every American citizen.

  • Free money. The GND aims to provide, and I am not making this up, “economic security” for all who are “unable or unwilling” to work.

  • Ban meat. Ocasio-Cortez admits that we can’t get zero emissions in 10 years “because we aren’t sure that we’ll be able to fully get rid of farting cows and airplanes that fast.” The only way to get rid of farting cows is to get rid of beef.

Have any of these ideas been tried in any states? Trains seem to run over budget when they are built, and they fail to turn a profit afterwards. But most of these have not been tried anywhere, so how are we supposed to know how much they will cost to implement, and whether they will actually work?

Now, you might be wondering where the dancing bartender will get all the money for these plans. After all, the cost of the Green New Deal has been figured at $49 trillion over the first 10 years. (And that’s in addition to the government takeover of healthcare “Medicare for All”, which costs $32 trillion over 10 years). She’s going to have to take it from someone… maybe from the top earners?

Just one problem with that:

The plan itself seems to insinuate that billionaires can pay for the whole thing. Of course, best case scenario, it is estimated that instituting a top marginal tax rate of 70 percent would raise a little more than $700 billion over that decade.

Are you beginning to see where the 100 million murders by government came from? When a plan fails to work as promised, what will the communist leaders do? Will they say that communism has failed, and step down from power? Or will they find people to blame for their failures, in order to stay in power? Historically speaking, it’s always been the latter. You can even see how it happens today, in places like North Korea and Venezuela.

From "The Black Book of Communism", (Harvard University Press: 1997)
From “The Black Book of Communism”, (Harvard University Press: 1997)

The Road to Serfdom

I want to recommend to everyone a famous book about how socialism leads to mass murder by government. The book is written by Nobel prize winner F. A. Hayek. This is one of my favorite books on economics. The full PDF of the book is available for download on archive.org.

The audio version is available FOR FREE on YouTube:

Outline:

  • 00:17 Foreword
  • 37:58 Preface
  • 41:51 Preface 1976
  • 50:09 Introduction
  • 1:08:46 Ch1 The Abandoned Road
  • 1:37:31 Ch2 The Great Utopia
  • 1:54:46 Ch3 Individualism and Collectivism
  • 2:18:32 Ch4 The Inevitability of Planning
  • 2:45:52 Ch5 Planning and Democracy
  • 3:20:06 Ch6 Planning and the Rule of Law
  • 3:54:33 Ch7 Economic Control and Totalitarianism
  • 4:23:01 Ch8 Who, Whom
  • 5:00:49 Ch9 Security and Freedom
  • 5:31:27 Ch10 Why the Worst Get On Top
  • 6:11:01 Ch11 The End of Truth
  • 6:38:41 Ch12 The Socialist Roots of Nazism
  • 7:09:40 Ch13 The Totalitarians in Our Midst
  • 7:54:43 Ch14 Material Conditions and Ideal Ends
  • 8:33:17 Ch15 The Prospects of International Order
  • 9:14:55 Ch16 Conclusion

All you need is 8.5 hours to listen to it. You won’t regret it, I promise. I have listened to the audiobook at least a dozen times. If that’s too long, there is a condensed version of the book.

They Hayek Center talks about condensed version of the book:

Max Eastman and the editors of Reader’s Digest wrote the condensed version of Friedrich Hayek’s “The Road to Serfdom” (pdf), which was read by millions of Americans at home and by servicemen all of the world when it was published in April of 1945.  It was the Reader’s Digest condensed version which turned Hayek’s little book into an American sensation — and Hayek into a public celebrity. The Reader’s Digest had a circulation at the time of more the 5 million copies, and the little journal was provided to each American serviceman, at home and abroad.

[…]An additional 600,000 copies of the condensed version were later printed and distributed through the Book of the Month club and by non-profit civic groups.

Can you imagine what it would have been like to live at a time where everyone clearly understood the danger of letting government administrators centrally plan an economy? But the new generation of young Americans have lost that knowledge, and they are voting for the people who will lead them down the road to serfdom.

Democrat Congresswoman calls for 70% tax rate to fund complete overhaul of energy production and usage

Cost of renewable wind and solar energy
Cost of renewable wind and solar energy

A top Democrat Congresswoman has announced her plan to convert all American businesses and individuals away from low-cost energy production (natural gas, etc.) to high-cost “green” energy sources.  The new government spending will require a tax rate of 70%, which means you (or your employer) will be taking home 30% of what they work for. Let’s look at the consequences of this plan.

Here is the report from Daily Signal:

Rep. Alexandria Ocasio-Cortez is ready to tax the rich to make her Green New Deal a reality.

“People are going to have to start paying their fair share in taxes,” the recently elected New York Democrat told TV show “60 Minutes” in an interview set to air Sunday.

Speaking of prior decades’ taxation rates in the country, Ocasio-Cortez added, “Once you get to the tippy tops, on your 10 millionth dollar, sometimes you see tax rates as high as 60 or 70 percent.”

What is this money for? To convert all existing energy production away from low-cost energy sources:

Among its goals are meeting “100 percent of national power” demand through renewable sources, retrofitting “every residential and industrial building for state-of-the-art energy efficiency, comfort, and safety,” and eliminating “greenhouse gas emissions from the manufacturing, agricultural, and other industries.”

Those changes are going to come with real costs. According to an editorial for Investor’s Business Daily, moving the economy away from fossil fuels to 100 percent renewable energy will come “at a cost of about $5.2 trillion over 20 years.”

You’ll be paying more for energy usage. And what’s more, your EMPLOYER will be paying more for energy usage, which means that a lot of people will be losing their jobs in order to make ends meet.

Even if we’re willing to shoulder the costs, it’s, well, impossible to achieve.

“Producing 100 percent of electricity from renewable sources is a practical impossibility in the near future,” stated a report issued by the Senate Republican Policy Committee in December.

Keep in mind that Ocasio-Cortez also wants to spend another $32 trillion over 10 years nationalizing the health care industry and turning it into an expensive single payer scheme. In Canada, single payer health care costs the average family about $11,000 in taxes, and they get inferior health care (long wait times, lower success rates for cancer / disease treatments, etc.). In 2018, the entire federal budget was $4 trillion. Adding $3.2 trillion (for single payer health care) and $0.52 trillion (for green energy total makeover) will DOUBLE the current budget, and give us $5 trillion dollar annual deficits. The entire national debt is currently $22 trillion, and we’d be adding $5 trillion per year to it. Interest payments on the debt would quickly take over the budget, blocking out all other spending.

Three points

I want to make three points about this.

First, even if we take every penny from “the tippy top” producers in America, we can’t afford a fraction of what all these big government programs will cost. In 2011, the Tax Foundation explained that even if you taxed ALL THE INCOME from all the people who make $200,000 or more, you would only raise $1.53 trillion dollars. We have to come up with $5 trillion annually to cover all this spending.

In any case, the rich are already paying “their fair share of taxes”:

The highest earners already pay the most taxes
The highest earners already pay the most taxes

Half the country doesn’t pay income tax at all, and that’s only going to increase because Democrats keep importing uneducated, unskilled immigrants.

Secondly, raising the tax rates does not guarantee that you will get more money from the people you are taxing. The same person who works 70-hour weeks in order to keep 70% of the $200,000 they earn will not work as hard if you only let them keep 30% of the $200,000 they earn. What will they do instead? Well, they can leave the country. They can hide their income by moving into the underground economy. They can downsize their business by laying off young, inexperienced workers. But most likely, they will just take a break, and reduce the amount of hours, so that they work normal hours in an easy job.

Raising tax rates just causes people to work less and pay less
Raising tax rates just causes people to work less and pay less

Democrats are the party of slavery, so they think that they can enslave people and those people will keep working. It’s not true. People are not slaves, and if you take most of what they earn, they they will stop working. I would personally quit my job and scale down to a regular job if someone raised my taxes over the 30% I pay right now.

Third, U.S. emissions already way down under Trump, because one of the first things he did was deregulate the energy industry, setting them free to innovate. Surprise! If the American people decides that pollution is a problem, then private sector businesses are going to have to solve that problem, since they can only profit by pleasing their customers. The American energy businesses were able to come up with innovative drilling techniques to extract natural gas, with virtually zero impact on the environment.

The Washington Times explains:

The Environmental Protection Agency announced Wednesday that U.S. greenhouse gas emissions dropped by 2.7 percent last year, the first year of the Trump presidency, even as the administration slashed environmental regulations and global emissions continued to climb.

The United States has cut carbon emissions more than any other country on the planet, despite not taking part in socialist climate accords:

Carbon emissions have declined more than any other country
United states carbon emissions have declined more than any other country

The problem with Democrat like Ocasio-Cortez is that don’t see how allowing businesses to innovate can lead to solutions to problems like carbon emissions. And that’s because they don’t have any serious experience in the private sector solving problems for customers in exchange for their money.

I hope everyone understands that the truth about Ocasio-Cortez is very different from the image that she portrays. She likes to present herself as “Alex from the Bronx”. But the truth is that she grew up in Yorktown Heights, which is over 80% white, with an average household income of $116,741 a year. Her father was an architect and partner in an architecture firm. She attended the prestigious Boston University, which currently charges $70,000 a year for tuition. She interned with former Democrat Senator Ted Kennedy. And the reason she likes socialism is because she failed to get a job in the field she was educated in. She was working as a bartender until age 29. She spent a quarter million on her education, and didn’t use it. And that spectacular failure of a woman is now deciding how the earnings of people far more educated and successful than she is will be spent. I want nothing to do with her.

Alexandria Ocasio-Cortez explains how she will pay for $40 trillion in new spending

Young people seem to think that implementing socialism in the United States won’t cost them a thing. The truth is, the rich don’t have enough money to cover all the spending that socialists want to do. It’s going to be young people who are stuck with the bill, and they’ll have to scale their lives down to third world levels to pay for what they voted for.

Here’s a socialist (former bartender) to explain how she would pay for $40 trillion in new spending, over 10 years:

The Daily Wire reports:

TAPPER: “Right. I get that. But the price tag for everything that you laid out in your campaign is $40 trillion over the next 10 years. I understand that Medicare for all would cost more to some wealthier people and to the government and to taxpayers, while also reducing individual health care expenditures. But I am talking about the overall package. 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 [trillion dollars]. We’re going by left-leaning analysts.”

OCASIO-CORTEZ: “Right. When you look again at how our health care works, currently we pay — much of these costs go into the private sector. So, what we see, for example, is, you know, a year ago I was working downtown in a restaurant. I went around and I asked how many of you folks have health insurance? Not a single person did. They’re paying — they would have had to pay $200 a month for a payment for insurance that had an $8,000 deductible. What these represent are lower cost overall for these programs. Additionally, what this is, it’s a broader agenda. We do know and acknowledge that there are political realities. They don’t always happen with just a 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 as purchasing cars as fully as fully as possible is a cost. It is an externality, if you will, of unprecedented amount of student loan debt.”

TAPPER: “I am assuming I won’t get an answer for the other $38 trillion. We’ll have you back and go over that.”

Some people are going to vote for her just because she’s young, female, and sounds so passionate. But let’s take a look at some numbers so we can understand how feasible her plans are.

First, the rich don’t earn enough money to be able to pay for trillions of dollars in spending.

In 2012, John Stossel wrote this in Forbes:

If the IRS grabbed 100 percent of income over $1 million, the take would be just $616 billion.

In 2011, the Tax Foundation explained that even if you taxed ALL THE DISPOSABLE INCOME from all the people who make $200,000 or more, you would only raise $1.53 trillion dollars:

There’s simply not enough wealth in the community of the rich to erase this country’s problems by waving some magic tax wand.

[…]After everyone making more than $200,000/year has paid taxes, the IRS would need to take every single penny of disposable income they have left. Such an act would raise approximately $1.53 trillion. It may be economically ruinous, but at least this proposal would actually solve the problem.

Socialists want to spend $40 trillion more over 10 years, or about $4 trillion per year. Taking most of what the wealthy earn would make up less than half of that spending.

Anyway, we’re not in a position to be doing any spending, because the costs of our existing socialist programs will be increasing going forward.

Pretty soon, our mandatory expenses will consume all of our tax revenues
Pretty soon, our mandatory expenses will consume all of our tax revenues

USA Today explains:

After averaging 35 percent of national income from the mid-1950s through 2008, the national debt has surged to 78 percent today and is projected to reach 100 percent within a decade, and 200 percent by 2050. Even these scary estimates rest on rosy assumptions — no new military or economic crises and creditors willing to accept record-low interest rates from a government heading towards a debt crisis.

Just to be clear, he’s talking about the debt-to-gdp ratio. When ours gets too high, interest on the debt will rise, be ause lenders aren’t sure they’ll be getting their money back. This will put us into a debt death spiral.

More:

The cause of this coming debt deluge is no mystery: Social Security and Medicare are projected to run a staggering $82 trillion cash deficit over the next 30 years. We are adding 74 million retiring baby boomers to a system that provides Medicare recipients with benefits three times as large as their lifetime contributions and pays Social Security benefits typically exceeding lifetime contributions (even accounting for inflation and interest on the contributions).

We can’t afford the spending we’re already committed to right now:

Politicians promise changes to avoid cuts in Social Security and Medicare, but their alternatives are plainly insufficient. Democrats favor tax hikes on the rich, but even doubling the highest two tax brackets to 70 and 74 percent would close just one-fifth of these programs’ shortfalls — and even that assumes people keep working at 90 percent tax rates when including state and payroll taxes. Slashing defense spending to European levels would close just one-seventh of the gap. Single-payer healthcare proposals are projected by even liberal economists to increase the debt. Republicans favor cuts in antipoverty and social spending, but even the unimaginable elimination of all anti-poverty spending would close barely half of the shortfall.

So, who’s going to pay for all this? It will be the people who have to work and pay income taxes for the next 30 years. The very same young Americans who are voting for socialists today. They’re the ones who are going to have to survive on a fraction of what their parents earned.

But there’s more. The truth is that raising taxes on the wealthy will cause enormous damage to job creators. If you look at socialist countries, the unemployment rate among young people is astronomical compared to the USA today. Why? Because these other countries have taxed and regulated businesses so much that they simply don’t have money to hire people, and if they do hire people, they pay them less than what they can earn for the same work in America.

Reuters explains:

Last December, the most recent full figures available, 25 million of the EU’s workforce of 240 million were unemployed and actively looking for jobs, producing an unemployment rate of 11 percent.

An additional 11 million were unemployed but had stopped looking or were not immediately available to start work, and were therefore not classified as unemployed. Adding them to the total would bump the jobless rate up to 15 percent.

Then there were more than 9 million part-time workers who wanted to work more hours but had no opportunity to do so – they were counted as employed but felt underemployed.

And finally there were those who were overqualified for their jobs and might well have been making more money elsewhere if they had found the right match for their skills.

European socialism is a kind of hybrid of socialism and capitalism, so it’s not too bad.  In places like Cuba, and Venezuela, you get the real thing. I doubt that most young people really understand what is going on right now on the streets of Cuba and Venezuela. If they did, maybe they wouldn’t be voting for socialism here.