Daniel Trotier
AP Macroeconomics
Mrs. Straub
3/8/2016
Sanders-nomics
Who doesn’t like free things? Birthday parties, giveaways, free samples, they’re all great. After all, you get to receive the satisfaction from consuming those products at no cost to you. But are they really free? For example, a set of clothes you may get for Christmas aren’t free, your parents, grandparents or whoever bought them for you had to spend their money they earned while they were working, you are just a benefactor of their generosity. Unfortunately, many people don’t realize this, as they believe anything can just be given unlimitedly, and this is what has enticed so many Americans to vote for Bernie Sanders.
Let’s analyze Senator Sanders’ economic policy. Senator Sanders believes in income equality. Ideally, if we can bring impoverished Americans to a livable income where they can support their family comfortably, that would be fantastic. However, Senator Sanders believes that increasing taxes on the wealthy and redistributing the wealth will alleviate the problem of inequality in the form of free college-tuition for all and increased spending in federal welfare. Another one of his goals is to “restore and expand” the middle-class. But what would this really do? A key statistic that many Sanders supporters tout is that “the top one-tenth of one percent owns almost as much wealth as the bottom 90 percent”, which justifies their claim to increase taxes on that 0.1%. However, the people who make up this top 0.1% are CEO’s, Investors, and Entrepreneurs. If taxes are increased on these corporations, they can no longer inject money into our economy as their disposable income would decrease. Also, they may be driven away from the higher taxes and move their money elsewhere, like Pfizer moved to Ireland (Mole). Either of these result in less investment spending, decreasing the GDP. These changes will also cause a decrease in consumer optimism and potentially decrease consumer spending. But the biggest problem comes with helping incomes to grow and furthering the standard of living. With the decrease in money being invested in firms, the multiplier effect is greatly reduced. The multiplier effect works in the following manner: money invested in firms is used to pay employees who work for those firms. These employees spend their income on other goods and services, which is transferred to other workers who provided those goods and services and so on. So, less money invested in firms results in less money to give to their employees and fewer jobs being created. Fewer workers and lower incomes means less money is spent on goods and services, which means less money is provided to the workers who provided those goods and services. This also decreases GDP in that the Short Run Aggregate Supply Curve is shifted left, causing Stagflation, which is the worst form of a recession in an economy, where the GDP stagnates and there’s Inflation. So, the main goals of Senator Sanders are to alleviate income inequality, and “restore and expand” the middle-class. However, his economic policy would result in an outsourcing of jobs, destruction of the U.S. Economy, and a decrease in the overall standard of living. This will lead to an exodus of this “billionaire” class, meaning that the cash flow on which his policies depend on will dry up. So, the only people left to tax would be the middle class to fulfill the government's ongoing entitlement spending. This means that the middle class he strived to build, would be diminished. Although I admire Sanders and his bold ideas and noble intentions, there has to be another a way to fulfill his goals without harming the economy or the creators of jobs. I have doubts that his plans are the solutions to eliminate poverty. So, the next time you hear someone offering something for free, remember, it’s not actually free.
Works Cited
"Issues - Bernie Sanders." Bernie Sanders RSS. Web. 08 Mar. 2016.
Mole, Beth. "With $160 Billion Merger, Pfizer Moves to Ireland and Dodges Taxes." Arstechnica. 23 Nov. 2015. Web. 08 Mar. 2016.
I would also argue that the increased income for the lower-classes would continue to benefit these upper-class CEO's and business leaders as well. Although they are paying more taxes, they should theoretically see increased business revenue because the lower-income people that now have more money will have greater opportunities to buy the products from some of these big businesses and even make their own investments that they may not have been able to before. Therefore, I don't entirely disagree with the idea of *slightly* increasing taxes on the top 0.1%, as I think there are lots of people that could benefit from it. Also, the free tuition you mentioned sounds pretty nice.
ReplyDeleteThis comment has been removed by the author.
DeleteEvan, while I can see where you are coming from when you say that lower-income people having more money will in turn benefit businesses, as they will have a larger amount of affluent consumers, I cannot agree that the benefit that the lower income people would receive would help our economy. The top 0.1%, and even more than that, have worked hard to earn their money. The people that their tax money would be going to likely didn't receive an adequate education or get a good-paying job. Just handing them money will only further encourage them to live off of the welfare of the government, instead of working hard to try and make a better life for themselves, which in the long run, would benefit them much more. We should allow the people that have earned their money to do what they would wish with it instead of catering to the less fortunate, as there are better ways to help them succeed. Also, from what I have learned, free tuition has more downsides than benefits. Finally, Daniel, you wrote a great blog post, and I enjoyed reading it.
DeleteBernie Sanders has been under a lot of heat lately for his claims of "free tuition". Because of this claim, Bernie Sanders is gaining popularity among young voters. Additionally, Bernie Sanders has stated that he is a democratic socialist, which cause many people to pause as socialism is linked to Karl Marx and Adolf Hitler. These two people were terrible people, which gives socialism, as well as himself, a bad reputation among the voting population. However, your statements about his economic policies bringing terrible whiplash back to the economy seem very realistic with what would happen if these policies were implemented. I do not believe it is fair to attempt to restore equality in wealth at the expense of the wealthy. So while Bernie Sanders is gaining popularity among younger voters by making false claims, the older more experienced voters will understand how absurd his claims are and vote for another, more realistic president.
ReplyDeleteThis was a very interesting piece because I have heard countless high school students and/or people uneducated about today's politics praise Bernie Sanders for his economic policies and his plans to save the economy. While I personally have never divulged too deeply into Senator Sanders plan, reading about it in detail, even while biased, proves how insane it is to vote for a socialist to lead an American government founded on the basis of capitalism and democracy. I think a lot of Americans like Sanders because they skim his economic goals and plans, and of course everything sounds like it will work out perfectly. In order to save the American economy from a possible Sanders Presidency, people need to be much more educated about today's politics especially in the most heated presidential race in recent history.
ReplyDeleteI have heard numerous things about Bernie Sanders such as his plan for free college tuition. This may appeal to the younger generation and persuade them to vote for him. However, as you stated, the tuition would not really be free--someone would be paying for the tuition no matter what. While Bernie’s plan to reduce income inequality and make the poor better off sounds good, it has many disadvantages as you stated that would significantly harm the economy. In a previous video that was watched in class, it showed the income distribution in the United States and the top 1% made an unbelievable amount of money. When people were asked to guess how the income in the United States was distributed, they were all far off from the actual numbers. To prevent this gap from rich and poor to get any worse, we need to take action now. However, trying to make income distribution equal would not work since it would cause people not to work as hard for their money. A solution could be to try to use a progressive tax so that the poor wouldn’t have to pay as much. Overall, Bernie’s idea sounds good when one first hears it, but there must be another way to create income inequality that won’t harm the economy. Great article!
ReplyDeleteThis is a very interesting topic because this is information that everyone should be aware of. As great as "free college tuition" might be, it would cause the government even more debt. The government is going to have to pay all of the professors and workers at the University. That means more taxes, so really you still are paying to go to college. Also, I disagree with Bernie's belief of equality to attempt to even out the large gap between incomes. The majority of the people with higher income have worked extremely hard for there money and it isn't fair for them to make less. Overall as great as free college tuition sounds, it will do more harm than good.
ReplyDeleteSocialism doesn't work. Especially in a country known primarily for its capitalistic opportunistic nature. You are absolutely right. Income redistribution would lead to outsourcing and offshore accounts. Not only is it ineffective but, in my opinion it is unethical. Why punish high achievers for working hard and attaining success. This could also reduce the incentives available to workers. Why work harder if it's going to get taken away in taxes.
ReplyDeleteMy grandfather always said "if something sounds too good to be true, it usually is". Free tuition needs to be paid by someone. Where do you think all of that millions of dollars is going to come from? Socialism has never worked and never will.
ReplyDeleteIt is really disapointing how naive the nation is, and how wrapped up people become whne the word free is thrown into anything. I'm glad that you wrote about this topic as it is a pressing issue today and hopefully it will change the mindset of some people out there and make them realize that Senator Sanders' plan will not work, and will in fact ruin our economy even more.
ReplyDeleteFree college tuition is a very interesting topic. Those who are for it don't understand the underlying negative effects it has on taxes, colleges, ect. Bernie Sanders appeals to the lower class by stealing from the rich and giving to the poor and I like the point you made that the rich can just move countries or decrease the money that their putting into the economy, hurting it either way. All in all great topic and interesting points made that I've never considered.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteThe red scare is real even if he is just a socialist. Your piece had well supported ideas that I could really tell you felt very strong about. I would agree with your stance of nothing is free. When Sanders advocates money equality, that only means inflation. Uncontrollable inflation in a country can lead to some terrible things. When there is money equality there is no incentive for anyone to work. This leading to, nothing is free and college should not be free, no government should stick the cost of every child in the United States to the tax payer.
ReplyDeleteThis is well written and explained very thoroughly. I do think that Bernie Sanders is appealing to the younger generations because of his claim of free tuition. I'm not going to sit here and lie but it does sound pretty appealing but I feel like it's not the right thing to do for the future of this country. If this free tuition is set in place, the economy would be even further in debt than it is already. I think it would be a bad idea to vote in Bernie Sanders to office because of his ideas to restore equality and his socialist viewpoints. It doesn't make sense to take away someone's hard earned money and give it to the government or the lower class, who chose a different path and didn't choose to work as hard. If we look at the future of the United States, socialism will not work and will continue to bring in more negatives than positives to the United States.
ReplyDeleteI really think that you did an excellent job of showing of that many candidates just try to convince people on what they're going to do rather than saying how they're going to do it, or any negative effects that it will have. Every action will have some sort of negative reaction, and some people should realize that many of the negatives are related to economics. So even if some things that candidates promote sound good we have to keep in mind that some bad may come of it.
ReplyDeleteI like the topic and it was very well written and had some outstanding vocabulary. However, with Bernie Sanders ideas to get rid of poverty are similar to socialists. It is unjust for the government to take someone’s money that was worked for and give it to someone else that probably isn’t deserving. In addition if there was money equality there would be no incentive to do actual work because the government would end up bailing you out. People that work hard for their money shouldn’t get stuck with paying someone elses bills or expenses.
ReplyDeleteAfter reading your article it became more clear to me how the money Bernie Sanders was proposing to use would be used. I do believe he has good ideas but they are not thoroughly thought through. But I believe all candidates do this to an extent so it's unfair to think that his ideas are the craziest. It was very good how you connected everything back to nothing is free.
ReplyDelete-carson Cotterell
After reading your article it became more clear to me how the money Bernie Sanders was proposing to use would be used. I do believe he has good ideas but they are not thoroughly thought through. But I believe all candidates do this to an extent so it's unfair to think that his ideas are the craziest. It was very good how you connected everything back to nothing is free.
ReplyDelete-carson Cotterell
I feel like at a glance, many of the policies he is trying to enact look like they would not work. However, it is very difficult to accurately predict the future of the economic landscape, while a long term plan can be adjusted to accommodate and improve based on results in the running. Bernie's plan has a very good foundation, and it's likely that any issues will be ironed out as time passes and the future of America is settled.
ReplyDeleteThese are all very important points, it reminds me of what we talked about in the beginning of the year about grading the US and we didn't give the US a good grade for equal distribution of income but if we did get a good grade in that category then people would stop working because no matter how hard they work they will get the same amount of money.
ReplyDelete