OLIVIA GINGOLD – April 24TH, 2019

The phrase “Feel the Bern” still resonates today nearly three years after the 2016 presidential election. This phrase references to Vermont Senator Bernie Sanders, who captured the interest of many Americans in his 2016 candidacy. Bernie Sanders is unique in the 2020 Presidential race in that he is currently the only candidate who has run for president in the past. This could be an advantage for Sanders—he has had time to develop his policy proposals and understands the ins-and-outs of campaigning; but it could also be a disadvantage—if he didn’t win the last election, why would he win this one?

Although Sanders’ previous campaign didn’t necessarily culminate with a Presidential bid, he started conversations that piqued the interest of many Americans. Those conversations have carried over to the current campaign, for both Sanders and other candidates who support many of the ideas he initially championed. Sanders is one of the more (if not the most) liberal candidates among the presidential hopefuls running for president, going as far as calling himself a “Democratic Socialist.” Unlike last week’s candidate, Beto O’Rourke, Sanders makes no ifs, ands, or buts about universal healthcare, jobs, and college. He also remains firm in his pushback against Wall Street, calling for higher regulation of corporations. Through these policies, Sanders hopes to expand the welfare state in order to ensure that the economy “works for all.” Two policies in particular that he championed in the lead-up to 2016 have reappeared in his new policies: universal health care and free college.

Sanders is a staunch supporter of Medicare for all, and believes that unwillingness to provide healthcare to all people is a human rights violation. Sanders’ solution to America’s medicare problem is through a “single-payer system.” This term refers to a system where a “single public or quasi-public agency organizes healthcare financing [while] the delivery of the care remains largely in private hands.” In this system, which Sanders unveiled as a bill in Congress earlier this year, the government would provide health coverage to all Americans. Nothing would be paid out of pocket—gone would be the days of deductibles or copays. The program would also eliminate other private forms of insurance like employer-provisioned insurance, and other forms of public insurance like Medicare and Medicaid, instead standardizing coverage across America. A benefit of this standardization beyond just limiting or eliminating healthcare costs for Americans would be reducing transaction costs for health care professionals like doctors and hospitals that arise from dealing with vastly different rates and policies from vastly different insurance companies. The healthcare system would cover primary and preventive care, prescriptions drugs, dental and vision care, mental health and substance abuse treatment, maternity, newborn, and long-term care.

Along with the healthcare issue, Sanders also discusses the rising and exorbitant costs of pharmaceutical drugs, a topic that isn’t nearly as often explored by other candidates as healthcare for all. To address the costs of pharmaceuticals, Sanders proposes a “Prescription Drug Price Act,” which forbids the United States from charging above median price of the drug in Canada, the UK, Japan, France, and Germany. If pharmaceutical companies failed to comply, the United States would be permitted to override patent laws and produce the generic drug at a more reasonable price.

How does Sanders plan to finance this major healthcare rehaul? He offers no definitive, single answer, instead creating a document of ten options to fund the single-payer government system which are split into three separate proposal categories: “options to make Wall Street and large, profitable corporation pay their fair share, options to make the wealthy pay their fair share, and options to save families and businesses on health care expenses.”

Another “for-all” issue Sanders began championing during the 2016 election is college for all. College for all doesn’t mean forcing all students in America to go to college, but rather, means making public colleges, universities, and trade schools accessible to all. In the College for All Act Sanders recently introduced, four-year public colleges would extend free tuition to families making below $125,000, while 2-year colleges (community colleges) would be tuition-free for any American citizen. This bill is supported by many other presidential candidates including Elizabeth Warren, Kamala Harris, and Kirsten Gillibrand. In addition to free tuition, Sanders College for All bill also proposes an effort to substantially lower student debt by cutting student loan interest rates for new loans by half, and allowing students and parents who have already taken out loans to refinance their loans to the same interest rates as new loans, which Sanders’ bill states as being less than two percent for federal loans. To support students who are “historically underrepresented in higher education,” Sanders bill creates a grant program that is dedicated to managing tuition and fees for students who attend colleges that are historically black or otherwise serve minority students. Sanders is a staunch believer in free college for all because he believes college students’ success is vital for a strong American economy in the future.

Ironically, “free college for all” is actually quite costly. Providing the free tuition alone would be $47 billion. What makes matters worse, this $47 billion only covers 67 percent of public colleges’ and universities’ tuition. The rest of the bill altogether would cost up to $600 billion. Sanders proposes to cover this cost by creating a “speculation tax” that charges a tax for each bond, stock, or derivative Wall Street bankers sell in the market.

This speculation tax appeals to Sanders’ critical view of Wall Street, which gives deeper insight into the rest of the vision that he has for America. He calls for “real Wall Street reform,” and “[demands] that the wealthy, large corporations and Wall Street pay their fair share in taxes.” He also hopes to improve the labor economy by reinvesting in public education and teachers (jobs that have been devalued in our present economy), enacting a federal jobs guarantee that ensures stable jobs for everyone in America, and creating trade policies that will create “decent-paying jobs in America.” Sanders has a vision for the larger economy. On April 14, 2019 he said that “we need an economy and government that works for all, not just the 1 percent.”

Bernie Sanders has been relatively consistent across his presidential campaigns, but many of his policies, like free college, Medicare, and expansion of Social Security, are expensive. Funding these programs will have to be an effort on the part of all Americans for these policies to succeed. From this, an integral question that will ultimately have a significant impact on Sanders’ success is whether Americans are ready to finance a welfare state, and sacrifice private institutions like private insurance and private college for state-owned and funded organizations.

Featured Image: USA TODAY

Disclaimer: The views published in this journal are those of the individual authors or speakers and do not necessarily reflect the position or policy of Berkeley Economic Review staff, the Undergraduate Economics Association, the UC Berkeley Economics Department and faculty,  or the University of California, Berkeley in general.

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One thought on “Presidential Economics: A Series on Presidential Candidates’ Economic Proposals Part 5—Bernie Sanders”

  1. Household net worth in January 2020 stands at $921,000 on average for all 128 million households, and total net worth is $118 trillion, reports the Fed’s Flow of Funds report, March 12, 2020. The nation is very wealthy. But of course a majority own less than $100,000, and 40% own a net zero in savings, reports the Credit Suisse bank Global Wealth report. Unfortunately about 40% of the nation is not wealthy, living at below twice the inaccurate poverty level (according to the Supplemental Poverty Measure), and according to the United Way charity 40% experience material hardship or poverty, see their ALICE report. Since 2009 the net worth has doubled, adjusted for inflation, from $48 trillion to $118 trillion, while the national income has increased by 25%, from $15.2 trillion to $19.2 trillion, and the “average weekly earnings of production and nonsupervisory workers”, about 82% of all private sector workers, has increased by less than 8%, says the BLS record. In short, wealth doubles, income goes up a quarter, but most workers only see a meager gain. Under these conditions it is not unreasonable to tax wealth and increase the tax rates on the very wealthy, and to use the unused abundance of the national economy for the benefit of those whose basic needs are not being met. I write the blog Economics Without Greed, Part Two. Sanders’ program makes the most sense of all the candidates.

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