The Democratic Socialists of America (DSA), the far-left organization currently taking over the Democrat Party’s ballot line, has made many promises, from Medicare for all to a 32-hour workweek, Universal Rent Control, and a Green New Deal. However, these promises come with a price tag, outlined in the new The Real Cost of Socialism in America report from the White House Council of Economic Advisors (CEA).
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Medicare For All.
According to the CEA’s report, ‘Medicare for All’ would cost approximately $47.41 trillion over the course of a decade. The CEA predicted a decline in medical productivity of 22 percent over the same period. Medical productivity is “a measure of health status achieved relative to the amount invested in care.” The report estimates that the program would require about $49.4 trillion in additional federal healthcare spending, only partly offset by savings elsewhere.
Student Debt and Free Tuition.
The CEA projects that canceling all student debt, along with providing free tuition, would cost approximately $3.6 trillion over ten years. More conservative estimates place the cost at roughly $2.1 trillion. The report points out that, because the highest-income fifth of U.S. households holds roughly 34 percent of student debt, compared with about eight percent for the lowest fifth, the subsidies would disproportionately benefit wealthier Americans.
A 32-Hour Workweek.
A 32-hour workweek would cost just under a trillion dollars, totaling $918 billion. The CEA model assumes workers retain their weekly pay while receiving overtime at one-and-a-half times their normal rate during a mandatory 32-hour week. It shows that GDP would contract by 1.5 percent annually and employment would decline by somewhere between eight and 12 percent. The model also predicted that unemployment would rise to somewhere between 6.6 percent and 8.2 percent, up from 4.1 percent. This would result in a loss of $5.2 trillion to GDP over ten years.
Open Borders and Amnesty.
The DSA has also promised open borders and amnesty for all illegal immigrants. The CEA’s lowest estimate places the cost of open borders and amnesty at approximately $440 billion, and the higher end at approximately $613 billion. This assumes a lifetime net fiscal cost for every illegal immigrant of $166,716. Amnesty, in particular, is projected to cost between $36 billion and $47 billion due to welfare programs.
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Green New Deal.
According to the CEA, the type of Green New Deal proposed by the DSA would cost $370 billion. Over a 25-year period, it would cost over $12 trillion, encompassing costs related to reaching net zero emissions and the resulting economic losses, costing around $8.4 trillion and $3.6 trillion, respectively. The report further notes that a Green New Deal could increase electric bills by 16.3 percent for the average gas household.
This is particularly important as a Green New Deal is a key commitment of Groundwork, one of the largest caucuses on the National Political Committee (NPC), the DSA’s governing body.
Universal Rent Control.
The cheapest item on the DSA’s wishlist, universal rent control, would still cost $16.2 billion over ten years. The report predicts a knock-on effect of roughly 3.3 million fewer rental units over the same period, assuming rent is capped at 1.875 percent. It also predicted that this would coincide with a 4.5 percent drop in housing quality.
Wealth Taxation.
Wealth Taxation is fast becoming the left’s favored way of explaining how it would pay for its policies. However, the CEA predicts that a five percent tax on the net wealth of billionaires would only raise $3.94 trillion over a decade. The parameters are based on a bill introduced by Senator Bernie Sanders (I-VT) earlier this year. The report also estimates that after a decade, the amount of wealth liable to taxation would shrink, resulting in $2.54 trillion in revenue.
Net Cost.
Taken together, the DSA’s key policies amount to a net cost of $48.9 trillion for American taxpayers. The CEA projects that this would result in approximately $355,000 in net fiscal costs per American household over a decade. It also projects that the federal debt would reach 254 percent of GDP over the same period, assuming the DSA’s policies were funded through borrowing.
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