Presidential wannabe Bernie Sanders is again dunking his spending bucket deeply in what he firmly believes is a bottomless federal well.
In Mr. Sanders’ socialist utopia, that well never runs dry, and the so-called “highest earners” he would “goose” to pay for his thirst for spending will continue to lay the golden eggs that make it possible.
The Vermont senator running for the 2020 Democratic presidential nomination is proposing yet another enormous new spending program, this one to address homelessness and affordable-housing issues. It’s pitched at a whopping $2.5 trillion over 10 years.
And he would double down by coupling it with an irresponsible — and, in all likelihood, unconstitutional — national rent-control scheme.
In a Sept. 14 speech in Las Vegas, Mr. Sanders said he would pay for his latest boondoggle by establishing a “wealth tax” on the top one-tenth of the “1 percenters” — by his calculations, the wealthiest 175,000 families.
Aren’t these the same sitting ducks — to mix a waterfowl metaphor — who Mr. Sanders has vowed he would take aim at to come up with much of the money for his “Medicare for All” scheme? That government takeover of health care would carry a price tag estimated by the Mercatus Center at George Mason University at a mindboggling $32.6 trillion over 10 years.
The 1 percenters are the same geese whose golden eggs also would need to be scrambled to finance Mr. Sanders’ “College for All” omelet. Far from “free,” it would, as proposed, cost $47 billion a year.
The Vermonter says his latest spending initiative is aimed at addressing what he called “the outrageously high price of housing.” To that end, the rent-control component of legislation that would vastly expand federal housing programs would cap annual rent increases at no more than 1.5 times the rate of inflation or 3 percent, whichever is higher.
“It is unacceptable to me that there is virtually no place in America where a full-time, minimum-wage worker can afford a decent two-bedroom apartment at a time when half of our people are living paycheck to paycheck,” Mr. Sanders claimed, albeit without citing any sourcing for that blanket assertion.
That was a variation on an assertion Mr. Sanders had made in a July 30 Democratic debate, at which he said, “Tonight, half of the American people are living paycheck to paycheck”
But as Time magazine wrote in a fact-check of the latter claim after the debate: “While the data on exactly how many Americans live paycheck-to-paycheck isn’t exact, a 2018 Federal Reserve report found that four in 10 adults said they would not be able to cover a surprise expense of $400 without going into debt or selling something.”
But that’s a comparison of apples and oranges, and hardly buttresses Mr. Sanders’ claim.
The Vermont independent was joined Sept. 25 by a kindred spirit, Rep. Alexandria Ocasio-Cortez, New York Democrat, who introduced what she called a “suite” of proposals dubbed “A Just Society.” The second of six planks in the platform is the Place to Prosper Act, which “would protect low-income tenants” by “among other things imposing a 3 percent national cap on annual rent increases.”
But if Mr. Sanders and Miss Ocasio-Cortez are going to take their political cues from Swedes (i.e., Greta Thunberg, age 16) on global warming, they would do well to heed a pair of Swedish economists on rent control. Despite regarding themselves as socialists, both said there are few economic concepts more counterproductive and destructive than rent control.
Economist Gunnar Myrdal, who won a Nobel Prize in 1974 and is recognized as an architect of Sweden’s welfare state, said, “Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision.”
Assar Lindbeck, another Swedish socialist economist, was more blunt, writing in a 1971 book: “In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.”
As anyone who has ever taken Econ 101 knows — or should know — that’s because, as Sam Bowman of the free-market Adam Smith Institute explained: “Putting a price ceiling on any product below the market rate causes shortages: Demand outstrips supply.”
For someone who proudly champions socialist “economic justice,” Mr. Sanders has done extraordinarily well for himself financially — much better, in fact, than most capitalists.
As Fox News reported back in February, Mr. Sanders owns three houses, including a four-bedroom Vermont lakefront home he bought in 2016 for $575,000.
Rather than pushing dubious rent-control nostrums, Mr. Sanders could do more for affordable housing if he were to redistribute his own wealth and simply donate one of those three homes to a needy Vermont family.
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