Bernie Sanders and Economics Don’t Mix

I have to apologize. I haven’t blogged in a while. The truth is that the current political climate is so disheartening that it makes it hard for me to want to write about it. With Donald Trump leading the Republican field and Bernie Sanders leading the Democratic field, there’s not much to want to write about. I don’t think I’ll ever waste another blog on Donald Trump because in my mind he is a joke, and in the end is unelectable (hopefully). Bernie Sanders seem like a much more viable candidate. He is honest, forthright and I get the feeling that he truly believes what he says. Best of all, all his solutions involve giving away “free” stuff! What’s not to like about that?

Bernie Sanders seems, to a rational, thinking person to be unelectable. His economic plans, even to a guy like me with only basic college level economics under my belt, seem to be coming from a virtual land of unicorn fairies, farting rainbows and pixie dust. He is constantly pining for the socialist systems used in the Scandinavian countries. He seems to not understand the American system or the different Scandinavian systems. The problem is that both systems are mostly socialist, just in different areas.

The American economy is socialist from the viewpoint of heavy governmental taxation and inefficient regulations in virtually every aspect of business. There is literally nothing that you buy or use that is not regulated by the government. The fastest growing costs to business are costs associated with compliance to governmental regulations. We are also a highly militarized society, with troops around the world protecting our freedom by trying to force people who don’t think like we do to think like we do. That in itself is a very socialist notion. Even though we have comparatively low personal income taxes compared to Denmark, over half our government spending is on entitlement programs. Because of those low taxes, we are not considered socialist in the area of personal freedom. We have a lot of say in what we do with our own money. Money that we earn.

If you look at places like Denmark or Sweden, the socialism mostly stems from the opposite side of the equation compared to the US. They have very high personal income taxes which allow the government to redistribute the wealth. What this means is that the income inequality is less pronounced, but the chance to become very wealthy is almost impossible. The rich in Denmark theoretically only make about $50,000 more a year than the poor. This means a rich person in Denmark would be considered solidly middle class in America. This is made up for with the vast number of social programs afforded to every citizen. When it comes to the relationship between government and business, these countries by and large are more capitalist than the US. The markets and trade systems are generally freer than the American system.

I think Bernie Sanders is right that we could learn things from Denmark and Sweden, just not the things he wants us to learn. I would love to adopt a more Scandinavian attitude towards efficient regulation, transparency and taxes on business. If we did that, America would be able to go past #12 on the freest economies list. What he actually wants us to learn is the other side of the equation, the side that relies on wealth redistribution. What he doesn’t realize is that it is the free markets that support the social programs in those countries. Bernie Sanders is unwaveringly against free markets. He wants the American socialism and Scandinavian socialism, with none of the capitalism from either. I have news for you, it’s the capitalism that pays for everything.

The other thing Bernie doesn’t realize is that in order for that type of system to work, the people need to buy into the idea that individual freedoms no longer exist, or at least don’t matter nearly as much as the needs of the many. That flies in the face of the American culture. We are a country made up of the most diverse group of people in the world. We are almost every ethnic group, almost every religion, color, creed, and whatever else I can’t think of. But one thing almost all of us have in common is our inherent drive to be individuals. Even those among us who would vote for all the “free” stuff are steadfast individuals. They would not readily accept the fact that the majority of what they earn would need to go to the government, because some government bureaucrat knows what to do with their money better than they do. Most Americans would not accept that, even with the “free” stuff.

Everything that I’ve seen and read regarding places like Norway, Sweden or Denmark tells me that the people there buy into their system. They all for the most part conform to the system and very few people step out of line. I am no saying that it’s negative in any way, to the contrary. If a group of people find a way that works, more power to them. What I am saying is that it won’t work in America any more than the American way of life would work there.

I am honored to know that a few people from Norway, Sweden and Denmark have read my obscure little blog. They seem like wonderful places and are definitely on my bucket lists for places to visit before I die. I would love to hear from anyone living there to see if what I am saying makes any sense. I would also to ask what part of your system that you would like to see exported to the US, as well as what you would import from the American way of life.