Commentary: Bernie Sanders’ jobs-for-all guarantee would be disaster for U.S. economy

Recently, Democratic Socialist Sen. Bernie Sanders announced a plan to essentially nationalize work. That’s right: He is promoting a “jobs for all” plan that would create a federal guarantee of employment for all comers, at a $15-an-hour minimum wage.

Back when I was an impressionable economics student at Florida State University, my favorite professor taught me that every economic-policy proposal involves a trade-off. We live in a world in which there is no government-imposed policy that does not, by very definition, take from one group to distribute to others. The key to finding the “best” policy prescription is to home in on the solution that maximizes benefit while minimizing cost. Sadly, Sanders could learn a thing or two from Dr. Holcombe — because there are an uncountable number of reasons to oppose the senator’s latest scheme.

For the purposes of brevity, let’s home in on the big three — economic, bureaucratic, and cost.

First, there’s the catastrophe that his program would wreak on the American economy. Since the election of President Trump, the U.S. economy has achieved growth rates not seen since the glory days of Ronald Reagan. The latest jobs report has U.S. unemployment at 3.8 percent, with average monthly job-creation rate of more than 200,000. These are impressive numbers. They have come about as a direct result of the president’s economic agenda. Establishing a federal work program that sucks jobs from the private sector, creates government-mandated wage inflation and inefficiently messes with our economic trajectory would have disastrous effects on the business cycle. Think Obamacare’s takeover of health care was bad? Well, this would be that on steroids.

Second, there is the complete and total lack of logic of those on the left who think that establishing a massive federal bureaucracy would somehow be able to discern the types of jobs needed, gather qualified employees, supervise jobs performed, conduct effective evaluations and deploy human capital in ways that the market could not otherwise do. I am reminded of one of my favorite one-two punches of inquiry when discussing policy. The first is, “Do you truly, deeply and honestly trust the federal government?” When the inevitable “no” comes, I follow up with, “Then why should we give them more authority over our lives?” That response is typically met with a pondering silence. It’s remarkable how simple logic can often confound.

Last, for a federal government more than $20 trillion in debt, this policy idea would absolutely break the bank. While the senator from Vermont has yet to provide a cost estimate or any plan to pay for his idea — these concepts tend to confuse socialists — others have begun to peel back the layers of the onion. Megan McArdle of the Washington Post looked at the projected impact. She began by assuming that a good portion of existing workers not earning $15 per hour (substantially above current median wage) would shift into this federal program, thereby extracting capital from the private market. It’s either that or businesses would start inflating wages and sucking productivity from our economic engine. The results would be somewhere between disastrous and apocalyptic. Her estimate is that Sanders’ program would run the federal government (taxpayers) somewhere from $1 trillion to $2 trillion per year. For perspective, consider this amount is more than the government already spends on Social Security and Medicaid, combined.

In some faraway dream land where the laws of economics and the market don’t interact with basic human nature, Sanders’ economic ideas may indeed work: jobs, health care, housing, college — free for everyone. Back here in reality, we must contend with the truth — that the populations of the former Soviet Union, North Korea, Venezuela, Cuba and others have been fleeced, starved and decimated by politicians making promises that fly in the face of reality. Let’s make sure we don’t follow in their footsteps.

Sal Nuzzo is the vice president of policy for The James Madison Institute in Tallahassee.

Article: http://www.orlandosentinel.com/opinion/os-ed-jobs-for-all-an-economic-disaster-for-everyone-front-burner-20180612-story.html

By | 2018-06-19T09:46:20+00:00 June 19th, 2018|In The News, Press|Comments Off on Commentary: Bernie Sanders’ jobs-for-all guarantee would be disaster for U.S. economy

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