Democratic socialism’s $50 trillion price tag
by Peter Navarro · The Washington TimesOPINION:
The White House Council of Economic Advisers has weighed and measured the Democratic Socialists of America’s agenda and found it wanting, to the tune of a $52.8 trillion federal fiscal burden over 10 years, or about $49 trillion after crediting a billionaire wealth tax.
Just how big is a $49 trillion DSA budget hole? Deep enough to bury the American economy.
Under the Congressional Budget Office’s baseline, debt held by the public is already on track to reach 120% of gross domestic product by 2036. Borrow that $49 trillion to cover the DSA deficit, and that ratio more than doubles, to 254%. Interest payments alone could exceed projected federal revenue.
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That is the macro picture. Now for the micro.
The Council of Economic Advisers modeled all eight pillars of DSA’s 2026 program. Seven carry direct fiscal and budget consequences, totaling a crushing $52.8 trillion in potential federal costs and lost revenue before factoring in a billionaire wealth tax that comes nowhere close to covering the deficit. The eighth pillar carries a human cost.
“Medicare for All” is the Big Kahuna. It adds $47.4 trillion to federal deficits. Canceling all student debt and making tuition free at every college would cost $3.6 trillion.
Add roughly $530 billion more for open borders and mass amnesty.
How about a 32-hour workweek with no cut in pay? That costs $918 billion in lost federal revenue, cuts 4.2 million to 6.9 million jobs, concentrated among workers earning $14 to $24 an hour, and pushes unemployment from 4.1% to between 6.6% and 8.2%.
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Then there is the Green New Deal. It costs the Treasury $370 billion in lost tax revenue. The far larger hit, more than $12 trillion over 25 years, lands on families and businesses through higher electricity, heating and car costs. Add rent control, and the gross DSA policy total is $52.8 trillion.
To fill that DSA fiscal hole, Washington must either borrow the money or take it from you in higher taxes.
Borrow it, and America’s deficit rises from 5.8% of GDP to more than 21%. The 10-year Treasury yield rises by nearly 6 percentage points, and 30-year mortgage rates could top 12%.
Meanwhile, the Council of Economic Advisers estimates that inflation would climb into double digits — and could rise as high as 160% over the next 10 years. The reason is simple: When Washington spends trillions of dollars that it has no plan to repay, that money chases the same goods, and investors expect the debt to be inflated away. Either way, prices rise.
Tax Americans to plug the DSA fiscal gap, and the math is no kinder. Income tax collections would have to rise to about 2.6 times current levels, and the average effective individual tax rate would jump from 14% of adjusted gross income to nearly 40%.
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Meanwhile, the effective corporate rate jumps from 11% to 30%.
The Council of Economic Advisers’ model shows the capital stock shrinking by 11.5%, labor hours falling by 16.2%, and real GDP permanently 14.6% smaller. After-tax hourly wages drop 28.4%, about $22,000 a year for the average household.
That is an American economy on life support. Now here is the human body count.
DSA calls for steps toward “fully abolishing the police and prison system.” The research the Council of Economic Advisers cites is blunt. Every 1% cut in police presence raises homicides by about two-thirds of a percent, and the dead are disproportionately Black. Per capita, the homicide effect of police staffing is twice as large for Black victims as for White ones.
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This is the dystopian, dangerous reality of the DSA’s utopian vision. Every “free” promise comes back as a higher mortgage rate, a bigger tax bill, a smaller paycheck and a deadlier street.
Gallup found in August that 57% of Americans ages 18 to 34 now view socialism favorably. These are exactly the Americans that the DSA agenda would hit hardest. It is their generation that would inherit a debt more than twice the size of the economy.
The Trump agenda offers the alternative: Build, produce and reward work. A manufacturing economy defended by tariffs that offers rising real wages and job security while bolstering our national security. Safe cities. A border closed to human traffickers, drug traffickers, terrorists and interlopers driving down wages and stealing American jobs.
This November’s midterm elections are very much a referendum on the Trump agenda versus the DSA agenda. Put the Senate and House in the hands of the Democrats, and the DSA agenda moves from the fringe to the floor.
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In today’s Democratic Party, DSA members and their allies win primaries: Angie Nixon, the Democratic Senate nominee in Florida; Darializa Avila Chevalier, Brad Lander and Claire Valdez in New York; Melat Kiros in Colorado; Chris Rabb in Pennsylvania. In Michigan, Senate nominee Abdul El-Sayed literally wrote the book on “Medicare for All.”
When they cast their ballots Nov. 3, voters of all ages and stripes would do well to remember the Council of Economic Advisers’ landmark analysis of the DSA agenda.
They also should look past figures such as Alexandria Ocasio-Cortez, Zohran Mamdani and Rashida Tlaib to the ghosts behind them: Hugo Chavez, Nicolas Maduro and Fidel Castro. The ghosts have new faces, but the con is the same.
• Peter Navarro is the White House senior counselor for trade and manufacturing and author of “Why Fauci Must Rot in Prison.”
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