WASHINGTON—The White House released a 70-page report on Oct. 23 that knocks socialism and far-left policies pushed by Democrats, such as “Medicare for All.”
“Coincident with the 200th anniversary of Karl Marx’s birth, socialism is making a comeback in American political discourse,” the report said.
“Detailed policy proposals from self-declared socialists are gaining support in Congress and among much of the electorate.”
The CEA report tries to illustrate how the United States would look like if the country implemented socialism to varying degrees. It examines the Nordic countries, which are commonly cited as success stories by present-day socialists.
If the United States implemented current Nordic policies, according to the report, American families with average incomes would pay $2,000 to $5,000 more taxes per year net.
The report claims U.S. socialists envision moving the country’s policies to align with those of the Nordic countries in the 1970s, which was the height of their experiment with socialism. The picture would be worse if America implemented those policies, with real GDP declining by at least 19 percent over the long term or about $11,000 per year for the average American.
“Proponents of socialism acknowledge that the experiences of the USSR and other highly socialist countries are not worth repeating, but they continue to advocate for increased taxation and state control in order to help low-income people,” the report stated.
Replacing U.S. policies with highly socialist policies such as Venezuela’s would result in a 40 percent decline in real GDP in the long run and cost about 24,000 per year for the average person, CEA estimates.
“From an economic perspective, it’s not difficult to see why socialism has not been optimal,” Kevin Hassett, chairman of the CEA, said in a conference call with reporters on Oct. 23. “It provides little material incentive for production and innovation—that is, for people and businesses to do what they can do to enlarge the economic pie.”
Today, the Nordic countries aren’t particularly socialist, Hassett said, adding that they don’t provide free health care, they don’t heavily regulate businesses, and their tax system is much less progressive than in the United States.
“Their past experience with socialism is one reason why the Nordic countries have moved so many of their policies away from socialism and away from the socialist ideal,” he said.
Medicare for All
Socialist policy proposals are making significant inroads in Congress. In 2013, “Medicare for All” by Sen. Bernie Sanders (I-Vt.) had no co-sponsors in the Senate. Today, however, more than one-third of Democratic senators have endorsed it.And the Senate and House “Medicare for All” plans are currently sponsored or cosponsored by 141 members of Congress, according to the CEA report.
The legislation seeks to establish a government-run, single-payer health care system, eliminating all private and employer-based plans.
The health sector is one of the largest sectors of the U.S. economy and, hence, the single-payer health care system “continues to be the cornerstone of current socialist policy proposals” in the country.
According to Hassett, U.S. socialists want to nationalize the payments for 18 percent of the economy through “Medicare for All” legislation. The CEA report argues that the proposal would marginally increase the fraction of the population with health insurance, but warns against the astonishing costs.
If “Medicare for All” were financed without additional borrowing or tax hikes, then all other programs of the federal government would need to be reduced by more than half, according to the report.
Hassett said this would result in a cut to Social Security of about $0.7 trillion and to the defense budget of about $0.4 trillion.
Or if Medicare for all were financed through higher taxes, the economy would shrink by 9 percent or about $7,000 per person in the year 2022, due to the tax burden.
“Evidence on the productivity and effectiveness of single-payer systems suggests that ‘Medicare for All’ would reduce short and long-run longevity, as well as overall health and healthcare delivery,” Hassett said.
For example, wait times to visit healthcare specialists are higher in countries with a single-payer system, he explained. In addition, the United States outperforms many European countries in the longevity of individuals over 75 years old. The study shows that the single-payer system reduces longevity and health, particularly among the elderly.
President Donald Trump has repeatedly said Democrats, should they seize control of power, would turn the country into the “next Venezuela.”
He said the Medicare for All Act would cost nearly $32.6 trillion during its first 10 years of full implementation.
“In practice, the Democratic Party’s so-called Medicare for All would really be Medicare for None. Under the Democrats’ plan, today’s Medicare would be forced to die,” he wrote.
The CEA report also talks about extreme socialist cases, such as Maoist China, Cuba, and the Soviet Union.
Socialist takeovers of agriculture, one of the largest sectors of the economy, tended to deliver the opposite of what was pledged, the report says.
“Government takeovers were advertised as the path to abundant food, helping the downtrodden, and punishing the rich. Food production plummeted and tens of millions of people died from starvation in the USSR, China, North Korea, and other state-run economies,” it states.
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