FREE STUFF FROM DEMOCRATS—A LOOK AT FUNDING

Where would the funds come from for the Democrats “free stuff”?

Some basic facts about our economy:

At the present time (August 2019) the USA GDP (gross domestic product) is estimated to be roughly $20 trillion dollars.  That is: 20 thousand piles of greenback in which each pile comprises one billion dollars.  The GDP is a measure in dollars of the value of all the goods and services  the nation produces in all of its business activities in a year.  The USA is the leader in this category.  For comparison China’s GDP is about $ 13 trillion US dollars, Japan about $5 trillion, Germany about $4 trillion.  Our GDP number places us at the very top of all the nations in the world.  

In order to protect the country and its citizens and carry on the essential business of state, the US government in Washington DC  taxes individuals and businesses based on their income.  US Federal revenue for 2019 is expected to be about $3.6 trillion dollars.   Thus we tax our businesses and individuals on average roughly at about 1/5 of our GDP.   

However, exigencies arise and plans are often unrealized so it is also estimated that at the end of the fiscal year we will have spent about $4.6 trillion dollars or about $1 trillion dollars more than we took in as revenue.  Yes that is correct.  We will spend about $1 trillion dollars that we do not have.  That figure —one trillion—is what is known as the “annual federal deficit”.  

These annual deficits are common and just as you might expect—they accumulate.  If, as in any working class house hold. no  one puts away money in the “cookie jar” for the rainy day and spend the family’s  entire revenue—there would be nothing left tp pay off debts.  In that “spend thrift” house hold debts would tend to accumulate from year to year.  

Over the years and decades the US government has almost always run a deficit.  As a result the annual deficits (except for a few years in the ‘90s) have accumulated to the present time to  about  $20 trillion dollars. This amount is known as the federal debt.  And as you may have noticed, that deficit is about equal to our GDP.  

Thus we owe to our bond holders and other entities we are indebted to about the same amount as the value of all of goods and services  that we as a nation produce annually.  

To service that debt in 2019 it cost the USA about $400 billion dollars.  That is money that we have to pay to our bond holders for using their money.  If we keep up with our spending habits as they are—some estimate that by 2028–in less than a decade—that amount will rise to close to one trillion dollars.  Get the idea?

According to several sources as well as the authors of the plan it would cost about $3 trillion dollars annually to implement the Warren-Sanders medicare for all health care plan. 

Where can we possibly get the funds to spend such an amount?

What about the other free stuff?  Where would the funds come to fund—the Green Revolution, free college for all, reparations for slavery, or health care for illegal immigrants, etc. etc. etc.  

We must keep in mind that we currently spend nearly one trillion dollars of tax revenue annually on wars, military hardware, care for veterans and salaries and maintenance of the largest military in the world and the 800-900 military bases we maintain world wide.  But even if we were to defund the entire military effort and divert one third of our tax revenue to medical care for all we would not have the funds for the healthcare program the progressives envision.  The other plans would also go begging.  

So clear;y these Warren Sanders ideas are “pie in the sky”.  

We could raise taxes or defund our military.