Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche


The Sanders Agenda: What Is It, and Would It Work?

It looks as if Bernie Sanders is becoming something of a problem for our friend Hillary Clinton. Some polls indicate that the U.S. Senator from Vermont’s level of support in the Democratic presidential nomination contest could be within 10 percentage points of that of Hillary Clinton in some states, including New Hampshire.

Sanders is also drawing large crowds in some parts of the country. He attracted 700 people to a rally in Las Vegas, Nevada; so many supporters turned out that the event had to be moved to a casino ballroom, The Washington Post reported. Sanders also attracted a crowd of nearly 5,000 people at the University of Denver on June 20, The Denver Post reported. With such support growing, we need to ask ourselves, what is Sanders’ agenda, and how would it affect the country?

The centerpiece of Sanders’ campaign is a 12-point economic agenda he’s been touting for some time. Not surprisingly, much of the program, called the 12 Steps Forward or Agenda for America, is pretty vague (at the end of the day, Sanders is still a politician), but it gives us a pretty good idea of Sanders’ thinking and shows why he has become so popular as of late.

Most of Sanders’ agenda consists of vague policy statements designed to appeal to supporters, but he has three big ideas that could have a profound effect on America. These Big Ideas need to be examined pretty closely because unlike most of Sanders’ proposals, they could be popular with average Americans and gain a lot of political attraction. The Big Three are likely to be popular enough to become part of the mainstream political agenda at some time in the near future.

Sanders’ Big Three

Since these Three Big Ideas could become a major part of American politics in the years ahead and influence our lives, I thought I had better analyze them in some detail. I’ll also try to figure out how popular and viable they could be.

  • Big Idea #1: Spend $1 trillion to fix America’s crumbling infrastructure.


  • What it really means: Distribute $1 trillion to state and local governments to spend on transportation and other projects, mostly highways.
  • What Sanders hopes it would do: create 13 million jobs. That is doubtful because most construction work is done by machines. It would create a lot of high-paid jobs for heavy equipment operators.


  • How likely is it? Very likely; it is not hard imagining Congress distributing an extra $1 trillion worth of pork, because most Republicans would probably sign on to that program as eagerly as most Democrats. There would also be a lot of support from some business interests, such as contractors and heavy equipment manufacturers like Caterpillar. Real estate interests might be supportive because it could lead to higher property values and more development. It is also one of the few Sanders proposals that might generate some support on Wall Street because it would be conceivably financed with bonds. Many average people would like to see crumbling roads repaired.
  • Potential benefits: It could stimulate the economy and encourage growth and new economic development. The funds allocated could also jumpstart next generation transportation technologies such as the Hyperloop. Large-scale infrastructure spending in the past, including the Interstate Highway System, the Erie Canal and the Transcontinental Railroad, did lay the groundwork for massive economic development, but the benefits were not seen for decades.


  • Drawbacks: Sanders admits he does not know where the money will come from. There is also no guarantee that building large amounts of infrastructure will stimulate the economy. Massive infrastructure spending in Japan over the past 25 years has not reversed the deflation plaguing that nation. There is also potential opposition from some natural Sanders allies, like environmentalists.


  • Big Idea #2: Free college tuition for all Americans. Sanders has introduced a bill he calls the College for All Act in the Senate, which would provide $47 billion to cover tuition and fees for all students at public universities. The costs would be covered by a “Robin Hood Tax,” a sales tax on investment transactions. That tax would be .5%, or 50¢ on every $100 worth of stock, .1% on bonds and .005% on derivatives.


  • What it really means: Use tax money instead of student loans to cover tuition costs at government-owned colleges and universities. Transfer wealth from Wall Street to Main Street via a sales tax on investments.
  • How viable is it? College for All is probably the Sanders idea with the most mainstream appeal, but the level of political support for it is unclear. The plan would face strong opposition from special interests that profit from the current status quo, including the student loan industry, private universities and the tax preparation industry. It is also likely to face opposition from the investment industry. Making such a plan a reality would be an uphill battle.


  • Another problem is fuzzy math. The plan would only raise $47 billion, but Sanders admits tuition at the universities would cost $70 billion. Under Sanders’ plan, states would pay 33%, or one third, of the costs, which would not be popular. That might also be illegal; the U.S. Supreme Court ruled that it was unconstitutional for Obamacare to force states to expand Medicaid in 2015 in a case called King vs. Burwell. If states refuse to go along, it might not fly.


  • My view is that it will be popular, but it will need major changes to be viable.



  • Potential benefits: It could stimulate the economy. The last time the federal government underwrote college costs for millions of Americans in the GI Bill right after World War II, an economic boom resulted. Eliminating student loan debt would enable graduates to spend more, which could stimulate the economy. New jobs could be created at colleges and in the wider economy. The success of a Robin Hood tax could increase the pressure to abolish or roll back the income tax, something that Sanders may not like or want but which could benefit average Americans greatly.


  • Drawbacks: It might not be necessary because new technologies like online courses could make college cheaper and more effective. Sanders could be financing an obsolete “business model”—colleges that could be made redundant by changing technologies. It could become nothing but welfare for college professors, which would not be popular. The ability of the Robin Hood tax to generate revenue is also unclear.


  • Big Idea Number #3: Medicare for all. Simply allow all Americans to participate in Medicare like senior citizens can.
  • What it really means: Expand America’s existing single payer health insurance system to cover all citizens and effectively switch most Americans from private or employer-provided health insurance to the Medicare system.


  • How viable is it? The level of support for such a measure is limited because the Obamacare catastrophe has given government-run healthcare a bad name. Sanders does not say how much it will cost or how it would be paid for. Medicare is already running out of money. Savings could be high if the system were more efficient. It would be popular among average Americans, particularly if repeal of Obamacare were part of the deal.
  • Something like this is probably inevitable because the current health insurance system in the United States is not working. Whether government has the will or the resources for Medicare expansion is unclear. Sanders risks provoking a fight with Democrats, who are heavily invested in Obamacare, with this one because he is admitting their scheme is not working and is unpopular by promoting this idea.


  • Potential benefits: It would stimulate the economy by increasing healthcare spending. There would be massive savings to employers, who could stop offering health insurance, which could lead to more job creation. People would have an added level of security and more economic opportunity because they would not be dependent on jobs for insurance. It could rationalize the health insurance system by eliminating bureaucracies like Medicaid, S-Chip and the Veterans Administration, which could lead to savings for taxpayers by reducing government spending.


  •  Drawbacks: The costs could be high, and the problems with Obamacare demonstrate that the federal government might not be capable of setting up such a system. Americans might not like the limits such a system could put on healthcare use. If implemented poorly, it could lead to the creation of massive and ineffective bureaucracies and vast amounts of wasteful spending without providing healthcare, much as Obamacare is. No funding or cost estimates are available, making it a very hard sell to policy wonks.

Sanders Agenda Does Not Go Far Enough

The strangest thing about the Sanders agenda is that it does not go far enough. Sanders fails or refuses to address some of the major problems afflicting America today, including the high cost of housing, inequality in the public schools, lack of funds for local government, income insecurity, the pension crisis, student loan debt and the coming crisis in Social Security in Medicare.

Sanders is to be commended for at least advancing a few ideas. Hopefully he’ll inspire other politicians to do the same because new thinking will be needed to deal with the problems facing our country. Simply repeating political platitudes will not address the potential crises we face.