Suppose Bernie Sanders wins the Democratic nomination. And suppose he then consolidates his party’s base, winning over the moderates who have heavily supported Hillary Clinton, and convinces the large majority of Americans who think they strongly disapprove of socialism to change their minds. And further suppose that he pulls off his “political revolution,” reversing decades of hardening polarization to draw tens of millions of currently Republican white people to support left-wing Democrats in Congress. Now it’s time for President Sanders and his democratic-socialist Congress to pass some laws. What happens then?
The centerpiece of Sanders’s domestic agenda is a plan for single-payer health insurance. Sanders claims his plan would immediately produce trillions of dollars in savings through lower health-care costs — not merely bending the cost curve down, as Obamacare has done, but snapping it sharply in the other direction. Kenneth Thorpe, a respected liberal health economist at Emory University, has estimated that Sanders’s plan is “completely implausible.” The Sanders campaign has called Thorpe’s estimates a “complete hatchet job” and, as Sanders’s supporters are wont to do, implied that he is bought and paid for by his corporate masters.
But the trillions of dollars in unspecified savings are not the only magic asterisk in Sanders’s plan. The Committee for a Responsible Federal Budget runs the numbers and finds that, even if you accept Sanders’s assumptions about his savings at face value, his plan would still fall several trillion dollars short of covering its expenses. The analysis also notes that Sanders would have to raise the top marginal tax rate to about 85 percent, which is above the level that economists Peter Diamond and Emmanuel Saez (who strongly support higher taxes on the rich) believe maximizes revenue. That is to say, Sanders would tax the rich at rates so high that even liberal economists suspect they would discourage work and raise less revenue than expected.
Now, if we’re assuming that Sanders is passing this law in a world where a massive popular uprising has given democratic socialists control of both chambers of Congress, then probably they can just go ahead and ignore the Congressional Budget Office. But what the numbers are telling us is that Sanders is not merely pushing the envelope of policy imagination. His platform is predicated on completely ignoring mainstream economic analysis.