October 13, 2015
It seems some establishment types are getting worried about the support that Senator Bernie Sanders is drawing in his presidential race. Breakingviews, the syndicated financial news service that promotes its “agenda setting insight,” went full scare tactics in a piece warning about “Bernienomics.”
The punchline is in the first sentence:
“A Bernie Sanders White House would be $8 trillion in the hole over a decade.”
Wow! $8 trillion in the hole, who would vote for that guy?
Okay, let’s first get out of the children’s section and put this in terms that at least some of Breakingviews’ readers would understand. An $8 trillion shortfall is a really big number, but expressed as a share of projected GDP in the ten years after President Sanders takes office it comes to about 3.4 percent. That is hardly a trivial figure, but probably a bit less scary than $8 trillion. After all, at their peak, the wars in Afghanistan and Iraq cost more than half of this sum.
But this is the less important point. Somehow it escaped the attention of the Breakingviews crowd that if everyone has Medicare through the government, then they no longer have to pay health insurance premiums. According to the Centers for Medicare and Medicaid Services (Table 1) this will save us roughly $15 trillion (@6.3 percent of GDP) over the first decade following the election of President Sanders.
There is a problem of how we get the money that we are now paying to private health insurers, mostly through our employers, to the government to pay for universal Medicare, but this is a political issue, not a problem of inadequate resources. In other words, most of us would not feel terribly aggrieved if the money that our employers are currently sending to private health insurance companies for our insurance were instead sent to the government to pay for universal Medicare.
This is what Senator Sanders is proposing. It would have been nice if Breakingviews could have been honest enough to explain this simple fact to its readers instead of trying sleazy scare tactics. But, that is what folks do when they don’t think they have a very good argument.
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