Economy and Business U.S.

Free College? Free Healthcare? Forget it! We’re $21 Trillion in Debt!

Progressive trailblazers Bernie Sanders and Alexandria Ocasio-Cortez are out on the campaign trail with their hot proposals of free college and free healthcare. These proposals have caught fire among their far-left base, but giving everyone healthcare and higher education threatens to burn the country to the ground-figuratively and literally!

Free college and free healthcare are touted as strategies to help the poor get ahead. However, according to NPR, the cost of higher education for all would be $75 billion per year, and medicare for all would cost a stinging $32 trillion over the next decade! That’s almost double the current federal budget of $3.8 trillion! Where is that money going to come from? Americans already spend more of their hard-earned money on taxes than on food and clothing combined, so nearly doubling the amount of money going to Uncle Sam will only incense the electorate.

The Democratic Socialist Senator from Vermont, who owns three houses, has demanded that top 1% pay their “fair share”- raising the income tax rate on the top brackets. That plan will only drive money into offshore accounts, burning a hole in income tax revenue. The top 1% paid 38% of income taxes in 2015 – raising their taxes simply because they have more money to take is nothing short of greedy and morally reprehensible.

A common argument claims that if the United States has trillions of dollars to spend on warfare, then it can set aside some funds for education and healthcare. However, the United States doesn’t have the money for continuous warfare. The military is spending money it does not have to sustain its efforts, which has contributed to a steep increase in the national debt and an explosion in the federal budget deficit. Almost $6 trillion has been spent fighting the War on Terror, which is lot likely to end anytime soon.

This country is currently $21 trillion in debt! That’s about $65,000 per citizen. We are saddling newborns with a bill that exceeds a year of average university tuition! Increased government spending to pay for free anything will only drive the national debt — and the bill we weigh down our newborns with-higher at an even faster rate.

Our government’s current spending levels are unsustainable. Its debt is unsustainable. We cannot depend on borrowing forever to fuel government spending. Government spending on subsidies and benefit programs is not productive, it reduces output and income.

Over 40% of the national debt is currently held by foreign entities, to which the United States must pay the principal and interest on its loans. That money has to come from somewhere: the taxpayer. Taxes will have to increase to cover payments, which will decrease investments and spending, distorting the economy.

Moreover, the federal government will have to earmark more and more money towards interest, and redirect funding away from government agencies and programs. This means less money to spend on national and economic security, education, and research.

Astronomically high debt also creates financial fragility; a steep worldwide recession or depression could cause the money for loans to dry up, suddenly arresting government spending – and therefore – government functioning, inviting chaos to reign. This country could – quite literally – burn to the ground.

Of course, we must take action to increase Americans’ access to higher education and healthcare. That action isn’t government subsidies, it’s government pullback. Government should not be bestowing endowments upon private institutions or providing loans to students. There is no Constitutional authorization for the government to be spending money on education.

Government-subsidized loans sparked the skyrocketing college costs. Colleges and universities are incentivised to raise tuition when they know the government will cover the costs, no matter how high. This has produced the monumental student debt crisis graduates face today.

College tuition used to comprise a fraction of middle class income, but today average costs can equal or even exceed median incomes. Withdrawing the subsidized loans would force costs downward, making higher education more affordable. Subsidies to state universities must also be reduced, with salaries of administrators and sports coaches capped.

Football and basketball coaches are the highest paid public employees in 39 states, raking in tens of millions of dollars a year! Taxpayer dollars should not be going to subsidize state schools unable to properly prioritize spending!.

Government must also pull out of healthcare. The FDA’s lengthy 10-year approval process for new drugs makes them very expensive and time-consuming to put on the market, driving up their costs. The FDA also crushes potential competitors out of the market, allowing bigger drug companies to dominate and keep prices high. Martin Shkreli took advantage of the FDA’s framework to raise the price of a life-saving drug to an exorbitant level. Government regulations reduce incentives to compete on price, a phenomenon law professors Charles Silver and David Hyman call, “Erectile Pricing” in their new book, Overcharged: Why Americans Pay Too Much for Health Care.

The national right to try law,  signed in May 2018,  allows terminally ill patients to try drugs pending approval from the FDA. Successful products might now be marketed and drive prices down. Regulations and licensing barriers that insurers and medical professionals use to crush competition and keep costs high must be repealed. Cato Institute Senior Fellow Michael D. Tanner provides more solutions to the healthcare crisis. He concludes that only a true free market approach will afford the most people good health coverage.

Alluring promises of free college and free healthcare may have caught the attention of progressive voters, but both are prohibitively expensive, and attempting to enact one or both of these programs could send our country, already trillions in debt, crashing down in economic flames.

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One comment

  1. Yeh, but…. You are correct about the $21T in debt. But that is today. The problem is that these policies will take 10 years to have actual effect on society, and then what will the economics look like? Unfortunately they don’t help there either. We have about $84T in unfunded liabilities for social security & Medicare, and if you think any politician is going to vote to destroy social security & medicare and lose the Boomer vote support, then you are smokin’ something. The reality is that we are stuck with WAY MORE than $21T in debt, and we have to stop thinking about the immediacy of the situation and plan out 10 years ahead. That is what got us into this mess, as each current and previous administration used spending as a short term fix that only avoided a problem, rather than address it correctly.

    So I suspect the only option will be to devalue the $USD and by doing that we are all going to see inflation go nuts. The Federal Reserve will attempt to counter that with raising interest rates, but the administration will push back and consequently you’ll be paying Europe prices at the pump for gas. So long cheap fuel, food, toys, electronics, etc. By raising taxes to 2x the norm and devaluing the $USD, they could push off the problem for a while and if an administration came in and actually reduced expenses, we might just have a chance to right this wrong. But you and I know that this is not going to happen.

    I’m stockpiling Gold & Bitcoin. Forget anything tied to $USD and internationalize yourself to have somewhere to get out of the blast zone. More at https://www.beunconstrained.com

    Like

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