Under pressure to explain how she is going to pay for her Medicare-For-All plan – and all those other giveaways she is proposing – Massachusetts Senator Elizabeth Warren has promised to provide a detailed plan to pay for the $30-plus trillion for MFA over ten years, but that still leaves another $40 trillion hole in the budget for all that other stuff she promises.
Before we go further, I need to introduce you to one of “Larry’s Laws of Governance.” In this case, I refer to:
“Whenever dealing with government funding, the amount of income projected to be generated in the proposals will fall short and the costs will far exceed all projections.”
We are not talking about a rounding error. No. No. No. The projected income will be fractional, and the cost overruns will be in the multiples – 100, 200, 500 or even 1000 percent.
Keeping that fact in mind, consider the Warren craziness.
Uncle Sam spends between $4 and $5 trillion per year. He taxes up around $3.5 trillion. The difference is that $1 trillion-per-year deficit you read about – the amount we pass on to our kids and grandkids in the form of the National Debt – which is about $22 trillion at this time.
Over the next ten years, the Warren plan would put another $3 trillion cost each year. And if you add in all her other promises, it adds up to $7 trillion in costs each year.
The Warren plans are unattainable and unsustainable. She is playing with Monopoly money.
Sometime soon, Warren will come up with her plan to pay for all of this. Why? Because she has to. Every one of her presidential competitors is saying that the Warren plans are impossible to fund. If she cannot convince we the people that she has a REAL plan to pay for all those goodies, her credibility – and her campaign – will suffer.
So, there will be a plan. She will talk about a wealth tax, a progressive income tax, increased corporate taxes. She will have some charts to show how taxes will produce an unprecedented trillions of dollars without impacting on the all-important middle class. None of that will cover the costs. Not even close.
Her wealth tax will look good on paper to the gullible. As presidential candidate Andrew Yang pointed out, it has been tried in several countries – and was repealed as an utter failure.
Warren will sock it to the big bad corporations, but she will fail to note that corporations do not ultimately pay the taxes. They simply pass that cost onto the consumer. As I have noted many times in my commentaries, a tax on businesses is actually a regressive tax on all consumers. When the tax is increased on gasoline, you see the price increase reflected at the pump. That is true of all corporate taxes. Buy a shirt, hire an attorney or rent an apartment and YOU will pay their business taxes.
Warren will soon be presenting her latest big lie. Like any con man (or woman), Warren is about to flimflam the American public with her kinetic energy and a bunch of funny numbers. When she reveals here scheme, let us all keep in mind the admonition that “if it sounds too good to be true, it will not be.”
So, there ‘tis.