Category: Debunk This

This One Question Turns Socialists into Capitalists

The politics of so-called “democratic” socialism can best be described as “Santa Claus economics.”

Bernie Sanders, Alexandria Ocasio-Cortez, and those ideologically aligned with them routinely tout the high public support for the various cradle-to-grave social programs they support. And they are correct – if you ask people if they want free college, free daycare, free healthcare, etc., they’re probably going to say yes. And that’s hardly surprising. If you polled a group of middle-school aged boys whether or not they approved of a “free Xbox” policy, you’d see similar levels of support. You could also expect to see support fall like a rock if it were funded by an annual $300 allowance tax.

Due to fiscal reality, it’s truly no wonder that socialists routinely frame politics as “the rich vs. the rest of us,” to help give the impression that if only we taxed the rich a little more, all of society’s problems could be alleviated. As I’ve pointed out in another article, even taxing 100% of income above $1 million wouldn’t fund a quarter of Ocasio-Cortez’s agenda. Sanders and Cortez will point to Scandinavia as a shining example of countries that have implemented the sort of policies they desire – but never seem to mention that the bottom income tax bracket in Denmark and Sweden exceeds 30%, and there’s a national sales tax of 25%. (I wonder why!).

Despite how high taxes in America are, we do enjoy low taxes relative to most of the developed world and have a public with a general disdain towards taxation. It’s for that reason that despite all the polls showing the popularity of individual socialist programs, or socialism as a whole (particularly among millennials), I don’t believe Americans are as receptive to socialism as the left would like you to think.

To turn most self-described socialists into capitalists you really only need to ask one question; would you yourself be willing to pay more?

Medicare For All – Popular Proposal, Unpopular Price Tag

According to Ocasio-Cortez, there is 70% support for Medicare for all. Politifact rated her claim “half-true,” noting that polls vary (with some confirming her assertion). But as was reported in the website of the journal Health Affairs:

Claims of broad support for Medicare for All are largely overstated. A great deal of media coverage was devoted to one recent poll in particular, in which 70 percent of respondents (including 52 percent of Republicans) either strongly or somewhat supported providing Medicare to every American. Polls such as these tend to find support for the phrase “Medicare for All,” which crumbles when explained or clarified. For example, the Henry J. Kaiser Family Foundation (KFF) found that 62 percent of Americans support Medicare for all, yet only 48 percent prefer the synonymous “single-payer health insurance system.” When respondents were told that it would require increased taxes, only 34 percent still favored Medicare for all. This finding was replicated in a recent Politico/Harvard poll. 

Once taxes are brought into the equation, nearly as many people oppose Medicare for all as Ocasio-Cortez boasted support it. Oops.

Paid Family Leave

“Every other major country has family paid leave,” said Bernie Sanders during one of the CNN Democratic Presidential debates, in an attempt to shame America into adopting such a policy. According to one poll, there’s an incredible 75% support for paid family leave, so Bernie certainly planted his flag in a popular issue. And if only he never mentions the cost of such a program, he could have success in advancing it. According to the Washington Times, support falls even more drastically than for Medicare for all once the cost is included.

At $450 in higher taxes every year — the minimum price for a small-scale federal program — fewer than half of Americans support paid family leave. Actual costs would likely run much higher. The Heritage Foundation estimates that a 12-week leave program with benefits equal to 45 percent of pay would cost the typical household $570 in taxes per year. For full wage benefits, the cost soars to $1,300.

Since most Americans don’t want tax hikes of that magnitude, why not pay for the program by cutting spending elsewhere — say, in other entitlement programs such as Social Security and Medicare? The Cato Institute found even less support — only 21 percent — for that option.

I chose Medicare for all (or “socialized medicine”) and paid family leave as two programs to highlight because they’re the most commonly cited examples of social programs that “every other (advanced) nation already has.” While Bernie would like to paint a narrative that it’s the interests of millionaires and billionaires preventing the government from passing such grandiose programs, it’s American’s own frugality and disdain towards taxes doing that.

Which brings me to my final point…

Most Socialists Don’t Know What Socialism Is

While I’ve been focussing exclusively on polling relating to social program so far, what about claims that millennial support for socialism is rising? According to Gallup, 57% of Democrats and 51% of young people have a favorable view of socialism.

In reality, it’s not necessarily a positive view of socialism that they all share, but a positive view of what they think socialism is. As Tony Mecia noted:

[When] Gallup asked Americans to define “socialism,” The most popular response was “equality” (23 percent). In second place was the traditional definition, “government ownership or control” (17 percent). Providing enhanced benefits and services came in third at 10 percent. Six percent defined socialism as “talking to people” or “being social,” which means 4 out of 10 Americans think socialism is just some form of making nice.

So socialists apparently don’t even know what they believe – which makes sense to anyone that’s ever conversed with one before.

The Truth About “Rising Hate Crimes”

The inevitable revelation that actor Jussie Smollett faked a Trump-inspired hate crime in a city where Hillary Clinton received 84% of the vote sparked a predictable response from some quadrupling down on the Left – that while Smollett may have faked his hate crime, it at least drew attention to the very real problem of hate crimes!

Yes, people really did argue this.

So by their logic; thank god Smollett was lying for the truth? Let’s evaluate that….

Hate Crimes (Probably) Are Not on the Rise – And They Are Not Being Carried out in the Name of Trump 

The FBI’s latest report on hate crime statistics was quickly twisted to push a narrative that hate crimes are spiking due to Donald Trump’s presidency. Just take a look at some of the headlines:

Each argues a similar message; that hate crimes are on the rise, and that we can blame Trump’s rhetoric for it.

While law enforcement did report 7,175 hate crimes in 2017, up from 6,121 in 2016, there were over 1,000 additional agencies contributing information to the FBI’s Uniform Crime Reporting Program. Each new agency would only need to report one hate crime to explain the entire rise.

Additionally, the reported perpetrators aren’t who we’d expect if we were witnessing a rise in “white supremacist violence” inspired by Trump.  According to the FBI’s statistics on the perpetrators of hate crimes:

  • 50.7 percent were White.
  • 21.33 percent were Black or African American.
  • 7.5 percent were groups made up of individuals of various races.
  • 19.1 percent were unknown.

A disclaimer is in order, in that of the 50.7 percent classified as “White” by the FBI’s statistics, half are Hispanic or Latino (see the explainer under the “Ethnicity” heading). In other words, while whites make up 63.7% of the U.S. population, they account for only 25% of all hate crime perpetrators, a far underrepresentation that would not be expected if the media narrative were true.

Hate crimes also decreased against some of the groups in 2017 that the media would like us to believe are under siege in Trump’s America. Hate crimes against Muslims decreased from 307 incidents to 273 from 2016-2017. Meanwhile, the number of anti-transgender hate-crimes declined by a third, and the number of anti-male hate crimes tripled (but this is due to extremely small sample size).

For the most part, the increase in hate crimes from 2016-17 was mostly proportional across the board (which is exactly what we’d expect if this rise was mostly due to increased agencies reporting, not increased targeting of particular groups).

Fake Hate Crimes ARE on the Rise

According to fakehatecrimes.org, a website that tracks hate hoaxes, the rise in hate crimes hoaxes appears to have begun in 2012, and sparked in 2016 in the immediate months following Trump’s presidential victory. Below is tabled reports of false hate crimes per year since 1979 (and obviously there are many more, as these are just proven hoaxes), and hoaxes per month since 2016.

 

While there are obviously far more real hate crimes than fake hate crimes, fake hate crimes tend to dominate more news coverage due to their (supposed) particularly violent, humiliating, or otherwise egregious nature. The criteria for real hate crimes can range from everything from someone leaving a piece of bacon in front of a mosque (which is not likely to dominate much news coverage), to murder.

Such loosely defined statistics are easily manipulated, as was the case in a popular Anti-Defamation League study publicized by the media showing that anti-Semitic hate crimes rose 57% in 2017. The entire rise was attributable to a single individual who was phoning in bomb threats to Synagogues. Without him, anti-Semitic violence actually had decreased by 47% according to the ADL’s statistics.

Unfortunately, the criteria for what constitutes a hate crime is paper thin, and it’s nearly impossible to make an objective statement about whether or not they’re rising, given the varying number of agencies reporting them each year. What we do know though is that if Trump somehow inspired this alleged rise in hate crimes, they’re not picking their victims very well.

Debunking Kamala’s Uneducated Comment on Education Spending

Out on the campaign trail this week, 2020 presidential hopeful Kamala Harris called for less incarceration and more education in a fiery plea. “Let us speak the truth about education. You know, we’re a society that pretends to care about education. [But] not so much the education of other people’s children. Let’s speak that truth” Kamala said to thunderous applause. “Let’s agree that we have failed to put the resources into our public education system and instead we are putting money into a system of mass incarceration.”

The narrative that the reason we aren’t spending more on education is because we’re spending too much on prisons (which usually make up only about 5% of a state’s budget) seems random, but it does make sense in light of Kamala’s past. If Kamala wants to stand a chance in the 2020 field, she’s going to have to do some substantial rebranding in hopes that Democrats forget her past in pushing the same “mass incarceration” policies she’s now railing against.

Harris also says that “this truth” proves that we aren’t interested in investing in the future of our country.

The rhetoric Kamala is embracing doesn’t even make much sense for a whole host of other reasons, the first being that way more money is spent on education than prisons. While some liberals will try to downplay the amount already spent on education by only citing The Department of Education’s budget, the DOE’s budget accounts for only a small sliver of total education spending in America. As everyone paying property taxes is aware, most education spending occurs at the state and local level. Of the $1.1 trillion that all levels of governments spent subsidizing education in 2018, over 10 times as much was spent at the local level alone ($708 billion) than federal. Meanwhile, the annual cost of federal, state, and local incarceration is nearly $90 billion. According to basic math, $90 billion is indeed less than $1.1 trillion.

For some more context on just how much America invests in education – we spend more on the military than the next seven biggest spenders combined – and we still spend more on education than on the military. Even if we include money spent on veterans healthcare and foreign aid, more is still spent on education.

Education Spending and Outcomes Don’t Correlate

Since most education spending is done at the state and local levels, average spending varies by state and locality. If Kamala is right that we can simply spend up performance, we’d expect districts that spend more to perform better. And they do not. A government study from the National Center for Education Evaluation and Regional Assistance reported no correlation between spending and test scores or graduation rates, and that’s visible in the scatterplot correlating education spending and test scores below:

The Same Trend Holds True Nationally

While there’s no correlation between spending and performance at the state level, there’s also been no national increase in test scores as average education spending per student has sharply increased nationwide over the decades. According to the Cato Institute;

The achievement data come from the Department of Education’s own National Assessment of Educational Progress “Long Term Trends” series, which regularly tests nationally representative samples of U.S. students, drawing from the same pool of questions in use since the tests were first administered around 1970. These are the best data we have on what our kids know by the end of high school and how much it has cost to get them there.

 

None of this is to say that more spending on education is bad – but it is to say that how efficiently money is used matters. A decent chunk of education spending in some districts has suffered largely due to administrative bloat over the greater half of the past century.

The bigger problem for most schools isn’t the amount of funding, it’s the allocation of funding.

Abolishing all prisons wouldn’t even save enough money to boost total education spending in this country 10%. It looks like Kamala is going to have to find a new scapegoat.

Trump is Right – A Border Wall Worked for El Paso

During his recent State of the Union Address, President Donald Trump renewed his calls to build a wall on the U.S.-Mexico border and strengthen border security. “The border city of El Paso, Texas, used to have extremely high rates of violent crime — one of the highest in the country and considered one of our Nation’s most dangerous cities. Now, with a powerful barrier in place, El Paso is one of our safest cities. Simply put, walls work and walls save lives. So let’s work together, compromise, and reach a deal that will truly make America safe.”

Trump later repeated his claim during his recent visit to El Paso, noting that while there were 1,200 murders last year in Mexico’s border-town of Juarez, there were just 23 in bordering El Paso.

Trump is correct that El Paso is one of the safest cities in America (with the third lowest rate of violent crime), though his characterization that it was once one of the nation’s most dangerous is incorrect. A better phrasing of the argument would be that El Paso simply saw a significant decline in violent crime after the construction of a border. Trump is correct that bordering Juarez is one of the most dangerous cities in the world, though they’ve seen significant declines in violence in recent years.

The Fact Checkers Fire Back

NBC’s Jane Timm wrote that “Violent crime has been dropping in El Paso since its modern-day peak in 1993 and was at historic lows before a fence was authorized by Congress in 2006. Violent crime actually ticked up during the border fence’s construction and after its completion,” a claim completely debunked by the chart accompanying her article:

CNN was even more dishonest and ran this graphic ignoring the implementation of Hold the Line in 1993 (more on that in a bit).

NBC must think we’re only supposed to pay attention to the 2009 border fence completion on the chart – but not the immense increase in border security that Operation Hold the Line brought. Hold the Line, also known as Operation Blockade, began in September 1993 and ran through 2001. The Operation was launched with 130 agents and 3 maintenance crews that were deployed to repair holes in the border (mostly chain) fence. A stronger border was built to replace the chain fence in 2008-2009. Over 400 Border Patrol agents were also deployed on the 20-mile stretch 24/7. According to a 1994 study by the U.S. Commission on Immigration Reform on the effects of Hold the Line, it had an immediate effect in thwarting illegal crossings:

The average gross number of apprehensions along the entire U.S./Mexico border declined by nearly 12,000 per month from FY 1993 to FY 1994 (from about 66,300 to about 54,500 per month). Most of this decline occurred because of the sharp drop in the El Paso sector, where apprehensions dropped by more than 10,000 per month. The dramatic effects of Operation Hold the Line can also be seen in the steep drop evident for the post-Operation months. Thus, as measured in these terms, Operation Hold the Line clearly has reduced the number of linewatch apprehensions in the El Paso sector substantially and, by implication, the flow of illegal crossers into the United States.

And there’s no denying that the wall is still working as intended, as the following chart from Rep. Dan Crenshaw of apprehensions in El Paso proves:

Increased border security drastically reduced illegal crossings (and crime), but the fact checkers are ignoring all that and pretending that El Paso only beefed up border security in the form of a border wall.  The U.S. Border Patrol agreed that Hold the Line was a success early on because it inspired a similar effort in San Diego which reduced illegal entries 75% just a few years after being implemented in 1994.

Violent crime in El Paso was cut in half from the time Hold the Line began until the border was completed, though it must be emphasized this doesn’t mean that entire decline (or even most) was due to the prevention of illegal immigrant crimes.  Illegal immigrants are only a sliver of the population of El Paso (3%), so even a 100% drop in illegal immigrant crime wouldn’t appear that dramatic in a chart. I only mention this because I don’t want to oversell the wall’s benefits in El Paso, which undoubtedly worked in stopping illegal crossings.

Unfortunately, until a full border is completed, there will always be cracks that illegals can slip through regardless of how well any stretches of border built so far perform. We know that 20-miles of border security and a wall worked in El Paso – only 1,400 miles to go.

Don’t Be Fooled – Wages Are Not Stagnating Under Trump

The stock market is booming after a year of turbulence, the economy is adding far more jobs than expected despite the lowest unemployment since WWII, and despite the booming economy, we’re told that workers aren’t sharing in the prosperity. Why? Because wages aren’t rising fast enough.

Indeed, wage stagnation has been the great argument against Trump’s tax plan, allowing liberals to make the same tired old arguments against so-called “trickle-down economics” that we’ve heard for the past five decades. As a few writers at the Center for American Progress put it last year; “On measures that determine whether workers’ wages are keeping up with the cost of living, there has been little improvement and even some regression since the start of 2017, when President Donald Trump took office.” Forbes’ Chuck Jones wrote half-way into last year that “While GDP hit 4.1% for the June quarter… the unemployment rate is hovering at all-time lows, inflation continues to increase, real wages are stagnant.”

Before completely tearing apart a claim, it’s worth explaining the basis for why people believe it to be so. Private sector wage growth in 2018 was about 3.2%, respectable at face value, but only a net 0.76% increase when you account for inflation being 2.44% that year. It’s on this basis that the Washington Post’s fact checker Glenn Kessler gave Trump’s claim that wages are finally rising once again after stagnating “four Pinocchios,” which are reserved for particularly-bogus claims.

Kessler isn’t an economist, so he can be forgiven for not realizing that his “fact check” isn’t as solid as he thinks. Rather than take isolated statistics at face value, it’s important to remember that all the figures we’re dealing with are averages and can be affected by external factors, such as:

  • An increase in the rate that people are retiring. Since those nearing retirement have decades of work experience, they far out-earn the average American. In fact, 55-64 year olds boast wages 28% higher than those age 25-34.  If my workspace consisted of me earning $10 an hour, Dan earning $15, an hour, and a prospective-retiree earning $30 an hour, the average wage would be $18.33. But suppose the prospective-retiree retires while Dan and I simultaneously see our pay hiked to $15 an hour (+50%!) and $20 an hour (+33%). While every worker saw their wages increase massively, the average wage at this hypothetical firm as decreased to $17.50 an hour.
  • The labor force participation rate has increased under Trump. Those who previously had given up looking for work are now re-entering the labor force. Those who’ve been out of the workforce for an extended period of time tend to have less skills in the first place – and those skills they do have atrophied over time. While they’re not dragging anyone’s individual wages down, their addition to the workforce does lower average wages on paper.

As the San Francisco Federal Reserve wrote regarding those two phenomena, “counterintuitively, this means that strong job growth can pull average wages in the economy down and slow the pace of wage growth.” The San Francisco Fed’s most recent calculations quantifying the effects of those variables were in the second quarter of 2018, and estimated a drag of about 1.5 percentage points. Assuming that remained constant for the year, it would imply nominal wage growth of 4.7% in 2018, or 2.26% post-inflation. 

While I chose to focus on 2018 in particular because it’s the first year to be impacted by the Trump tax cuts, wages in 2017 were also higher than advertised. Nominal private sector wages rose 2.5% in 2017 (about in line with inflation of 2.13%), but rose close to 4.5% (or over roughly 2% net of inflation) once accounting for retirees and those rejoining the workforce.

I’ve been using the consumer price index thus far in making all my inflation adjustments (because it’s the most commonly used inflation metric), but it does tend to overstate inflation relative to other inflation measurements. For example, if I instead measured inflation using the personal consumption expenditures index (PCE), inflation is roughly 0.5 percentage points lower than used in my prior calculations. In other words, real wage growth was an even higher 3% in 2017, and 2.76% in 2018, using the PCE.

By those figures, a household with an annual purchasing power of $50,000 when Trump took office should have the equivalent of roughly $53,000 today. They certainly haven’t noticed any wage stagnation.

Liberals are Twisting the Numbers to Say Trump Raised Middle Class Taxes

Are middle-class taxes going up under President Donald Trump? This tax season there seems to be a lot of confusion.

Owing More Doesn’t Mean Paying More

A widely circulated CNN article is being misinterpreted to claim that taxes up are in 2018. “The average refund is down about 8% under the first full year of the overhauled tax code, according to data released by the IRS on Friday. Refunds averaged $1,865 compared to $2,035 for tax year 2017,” reported Victoria Cavaliere.

A large source of the confusion seems to be coming from the fact that the percentage of income withheld from paychecks has decreased. Suppose for the sake of simplicity that someone earns $50,000 a year, pays 20% tax ($10,000 annually), and pays that tax in the form of $200 a week for a 50-week work-year. Since they pay exactly what’s owed, they would receive no refund. Now suppose the tax rate decreases to 18% (so $180 a week is owed), but because a smaller percentage of taxes are withheld, only $170 is actually paid. Thus, while that person had their taxes decrease by $100 overall, they would still end up owing $500 at the end of the year.

Or put simpler: people are receiving smaller refunds because they paid fewer taxes in the first place.

It’s doubtful that the average employee is paying attention to such a thing, so you can hardly fault some people for mistakingly believing their taxes went up. However, those economically inclined have known this since July 2018 when the Government Accountability Office released a report stating that 30 million taxpayers would end up owing money in 2019 due to insufficient withholding, a significant increase over the year prior. The percentage of employers that over-withheld employees taxes decreased from 76% to 73% from 2018-2019, and the percentage that underwithheld tax increased from 18% to 21%. Both groups are likely to see an increase in their taxes owed.

Bear in mind that we have a labor force of over 160 million people, so each percentage point change is equal to 1.6 million workers (or 9.6 million overall who experienced a change).

Rates Did Decline

The Trump tax cuts composed of both corporate tax reform (cutting the corporate tax rate from 35% to 21%), and across the board cuts to individual income tax brackets. Below is the percentage point decline for each bracket. Also note that $5,650 increase in the standard deduction. For someone in the 22% bracket, the value of the increase in the standard deduction comes out to about $1,243 in post-tax income.

SINGLE TAXPAYERS
2018 Tax Rates – Standard Deduction $12,000 2017 Tax Rates – Standard Deduction $6,350
10% 0 to $9,525 10% 0 to $9,325
12% (-3%) $9,525 to $38,700 15% $9,325 to $37,950
22%

(-3%)

$38,700 to $82,500 25% $37,950 to $91,900
24% (-4%) $82,500 to $157,500 28% $91,900 to $191,650
32% (-1%) $157,500 to $200,000 33% $191,650 to $416,700
35% $200,000 to $500,000 35% $416,700 to $418,400
37% (-1.6%) Over $500,000 39.60% Over $418,400

Before the Trump tax cuts, the bottom 80% of income earners paid roughly 33% of all federal income taxes, but received 35% of the benefits from the Trump tax cuts. The top 1% paid 27% of all federal taxes, and received only 21% of the tax cut, according to the center-left Tax Policy Center.

Who Could End Up Owing More?

There are exceptions, however, and those likely to actually be paying more this year are homeowners on coastal states, which tend to have higher property tax burdens (mainly stemming from higher housing prices in those states), and high state income taxes. The Trump Tax cuts capped state and local tax deductions (SALT) to $10,000 a year, so those who pay more than that some are losing out on deductions (which appears to be the case of Dennis, the second tweet quoted at the beginning of this article).

Prior to the Trump tax cuts, 77% of the benefits of SALT deductions went to those earning above $100,000, while only 6.6% went to those earning below $50,000 (who are unlikely to be affected by the SALT cap anyway, unless they’re paying over 20% of their incomes in state and local taxes).

While this is inflated by high-income earners, the average SALT deduction claimed nationwide in 2015 was $12,471, meaning the average person claiming is losing a $2,471 write-off. Assuming they fall in the 24% income bracket, the value of that write-off is approximately $593, which would be more than offset by declines in individual tax brackets. A 2016 Tax Policy Center study found that a complete elimination of SALT deduction would raise taxes on 88% of households earning over $1 million, raising the taxes of the average millionaire by $46,550.

Overall, the average taxpayer saw a $2,200 cut under the Trump tax plan, while 6 percent of households saw an increase of $2,800 (nearly all of which were concentrated in the top 10% of income earners).

While it is true that the Trump tax plan did raise taxes on some earners, there were roughly 10 people who saw a cut (most of whom were concentrated in the bottom 90% of income earners) for everyone who saw an increase (most of whom were in the top 10%). Admittedly, I’d have preferred if all brackets saw cuts, but liberals can hardly mischaracterize the Trump tax cuts as “tax cuts for the rich.”

SALT Changes Coming in 2019?

President Trump has publicly indicated that he’s open to increasing the $10,000 SALT cap to provide relief to middle class and upper-middle class families negatively affected. “There are some people from New York who have been speaking to me about doing something about that, about changing things. It’s been severe on them,” he said earlier in the month to The Stamford Advocate. While he didn’t elaborate on the extent to which the cap would be lifted, the move is likely to garner support from coastal Democrats if advanced further.

The “Green New Deal” is a Total Disaster

Alexandria Ocasio Cortez has finally released a resolution to “recognize the duty of the Federal Government to create a Green New Deal,” which was released alongside an outline/FAQ of the “Green New Deal” that reads more like a bad high school policy paper than an attempt at serious policy analysis.

Overall, Cortez’s New Deal aims to “mobilize every aspect of American society at a scale not seen since WWII to achieve net-zero greenhouse gas emissions and create economic prosperity for all.” Cortez thinks it can all be done in less than 10 years, and if that doesn’t sound ambitious enough, Cortez tells us it’ll create “millions of family supporting-wage, union jobs,” provide economic security to all, and even “ensure justice and equity,” because why not.

Highlights

Not only does this Green New Deal look like it was conceived by a high schooler – it appears to have been proofread by a bartender. Read the passage below and see if you can figure out where exactly Neil Armstrong stepped foot on.

That was immediately followed up with a bullet point in which AOC ponders that perhaps because people questioned how they’d fund a $500 billion interstate highway system (which we were able to afford), that somehow that means we can afford her $40 trillion+ New Deal.

Cortez seems to be under the impression that because people laughed at past ideas that turned out fine, therefore hers must too be on “the ride side of history.”

To paraphrase Carl Sagan – just because someone laughs at you doesn’t mean you’re correct. People may have laughed at Galileo and Newton – but they also laughed at Bozo the Clown.

Cortez also thinks that it was investing half of our GDP in a world war was what created America’s greatest period of middle-class prosperity – not the fact that most of our international competition was literally destroyed.

Cortez would like an end to nuclear energy, even though nuclear gives off fewer greenhouse emissions than solar panels, and is the safest energy source.

Vermont is one example of a state that saw a rise in emissions when they closed their Vermont Yankee nuclear-power plant despite a commitment to renewables.

And as nuclear goes out the door, Cortez wants to retrofit every single building in the entire U.S. to make them Green New Deal-compliant.

As one person estimated, we’d “only” have to retrofit 39,179 buildings every single day for 10 years for this to be viable. An analysis of what it would require to fully convert the U.S. to renewable, zero-emission energy sources, includes “335,000 onshore wind turbines; 154,000 offshore wind turbines; 75 million residential photovoltaic systems; 2.75 million commercial photovoltaic systems; 46,000 utility-scale photovoltaic facilities; 3,600 concentrated solar power facilities with onsite heat storage; and an extensive array of underground thermal storage facilities.” Price tag: $7 trillion.

These logistical challenges would be quite the task for government – but if you ask AOC, the New Deal either will or will not require a massive role for government (depending on what part of the day you ask). Within a 12 hour period, she went from blasting Republicans who mischaracterized her plan as a “massive government takeover” to saying that her plan requires “massive government intervention” the following morning.

Zimbabwenomics

Knowing she’ll need revenue sources besides the uber-rich, AOC came up with a brilliant idea every banana republic has also thought they invented: simply printing a ton of money. She did at least give it some financial lingo (quantitative easing), which you have to admit, does sound more sophisticated than “print a ton of money out of thin air and pray there are no consequences.”

World War II and FDR’s New Deal were funded with massive hikes in the income tax and establishing new payroll taxes for Social Security and unemployment insurance at the expense of the middle class. A middle-class family in 1939 could earn up to $60,000 (in 2018 dollars) before paying a cent of income tax. By 1945, that was only $8,000. By contrast, the 2008 bank bailouts were repaid almost entirely by the banks that were bailed out.

The call for money-printing does illustrate that despite some of her rhetoric, Cortez is aware that there simply is no possible way her vision can be funded by taxes due to the exorbitant cost.

Perhaps AOC knows taxes won’t be enough to fund her dream, because nobody would be working if  it were a reality. She calls for guaranteeing “jobs with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security,” but also raises the question of how many people would bother to work in the first place under her system. Just look at that final bullet point below:

Key word: unwilling.

Oh – And By The Way, None of This Fights Climate Change

While the goal of the Green New Deal is reduce carbon emissions to zero, as economist Nicolas Loris notes,  even that wouldn’t make a difference in global warming.

Using the same climate sensitivity (the warming effect of a doubling of carbon dioxide emissions) as the U.N.’s Intergovernmental Panel on Climate Change assumes in its modeling, the world would be only 0.137 degree Celsius cooler by 2100. Even if we assumed every other industrialized country would be equally on board, this would merely avert warming by 0.278 degree Celsius by the turn of the century.

When the reward is 0.137 degrees, it’s hard to imagine a less efficient way to blow through $40 trillion.

Admittedly, I have doubts that climate change is even the end goal of this “green new deal” – I think the climate is just the trojan horse being used to justify a radical reorganization of society. While there’s plenty of talk about climate in AOC’s paper, there are numerous other references to the minimum wages, the alleged gender wage gap, the wealth gap between whites and African-Americans, indigenous rights, healthcare, affordable housing, racial justice issues, and more. It’s for that reason one climate scientist calls this brand of progressives “watermelons” – green on the outside, red on the inside.

Luckily, we don’t have much to worry about. A recent poll found that two-thirds of Americans wouldn’t pay even $10 a month extra to fight climate change (most drew the line at $1). If the American public won’t pony up a few bucks, they won’t pony up trillions either.

In the meantime, AOC has removed the Green New Deal FAQ documented quoted liberally in this article from her website. She must’ve realized that her document is a better advertisement for the Republican Party than her own.

Can Liberals Do Math? The Problem With Warren’s Wealth Tax

At long last, some Democrats are proposing ways to fund the wide array of social programs they’d like implemented in America as part of their “cradle to grave” vision for government. The democratic-socialist darling Alexandria Ocasio Cortez has been smart enough to phrase her proposals in Robin Hood terms, calling for a 70% tax rate for all incomes above $10 million. There are plenty of millionaires who fit that criteria – over 16,000 in the U.S. – with $245 billion in taxable income above the $10 million thresholds, or 1% of GDP.

While it would require the equivalent of 20% of GDP to fund all the social programs Cortez desires, taxing all income above “only” $1 million at 100% (assuming everyone continues working the same amount) would raise “only” 3.8% of GDP. There simply aren’t enough wealthy people to fund what Ocasio desires, as her 70% tax would only raise between $16.4 billion and $38 billion a year.

Certainly, those like Cortez must know better. In one breath she (and others like her, such as Bernie Sanders) cite the Scandinavian countries as successful examples of socialism but never mention that it’s the middle class paying 50%+ tax rates there. She knows just as every other politician does that if you want to sell a tax hike to the American public, you don’t want them believing it’ll apply to them personally. The only liberals who seem to be aware of this are the ones that Democrats would rather not run for President (such as Howard Schultz and Michael Bloomberg).

Elizabeth Warren has become the latest to hop on the “soak the rich” bandwagon ahead of the 2020 election cycle, proposing an annual 2% wealth tax on households with net worths exceeding $50 million, increasing to 3% on net worths over $1 billion, which she claims will bring in $2.75 trillion for the Federal government over 10 years ($275 billion per year). Since this is a wealth tax, it would not be applied to annual income but would be applied to the total wealth of a person in the form of cash, stocks, bonds, property, and even private equity ownership, net of any liabilities. It should be noted that this tax is actually greater than 2% for the individual paying it because it will cumulatively reduce the level of income the payer is generating from their assets each year.

A net worth tax would require every single piece of equipment, acre of property, share of stock, etc. be appraised on an annual basis. Then the owner then has to find a way to carve out 2% of that value to ship off to Uncle Sam. This sort of wealth tax would be most damaging to those who invest in startups, as the sort of which we see spring up in Silicon Valley often reach valuations into the billions before turning a cent of profit. Taxing shareholders in those companies is effectively taxing hypothetical future wealth.

Since this is not a tax on income, it would require most wealthy people to liquidate assets to pay for it. If those assets were in the form of stocks and bonds, the wealthy individual was already paying a 20% tax on the dividends and capital gains those assets were generating each year (assuming they’re receiving qualified dividends and paying long term capital gains tax). If their wealth was in the form of real estate, the wealthy individual was already paying annual property taxes on the property. For many wealthy people, their net worth is only on paper. While our current tax system only taxes realized gains, Warren wants to tax hypothetical wealth.

Wealth taxes are disruptive – and wouldn’t generate as much revenue as advertised, given that the assets liquidated to pay the wealth tax were themselves contributing to the tax base, and evasion would be a guarantee.

The projected revenues of $275 billion annually from a wealth tax are unrealistic, as we know from analysis of more liberal wealth taxes. French economist Thomas Piketty proposed a comprehensive wealth tax on all net worths above $260,000, ranging from 0.5%-2% with the following brackets:

  • $260,000-1,300,000: 0.5%
  • $1,300,000-6,500,000: 1%
  • 6,500,000 and over: 2%

This is a wealth tax that would apply to a drastically larger percentage of taxpayers (while still applying the same 2% tax on wealth above $50 million that Warren proposes), and yet a Tax Foundation study found that it would raise revenues by just $62.6 billion, less than a quarter of what Warren advertised. The discrepancy in revenue from Warren’s estimates and the Tax Foundation’s comes from the fact that Warren isn’t taking into account the disruptive effects a wealth tax would have, or accounting for individuals who would hide wealth offshore to dodge the tax (which is easier than you’d expect, given the fluid nature of wealth).  The Tax Foundation also found that a wealth tax of Pikkety’s design would reduce capital formation by 16.5%, eliminate 1.1 million jobs, reduce GDP by 6.1%, and decrease wages by from 7% to 10% for every income quintile.

And for that massive cost to the economy, Warren’s proposal wouldn’t even fund the federal government for a week. Wealth taxes and 70% income tax rates on the rich may be popular politically, but they won’t make a dent in America’s current fiscal hole. On the other hand, it wouldn’t surprise me if Warren and Cortez’s real endgame here is to simply punish the wealthy.

More Liberal Lies About Venezuela

The reign of Nicholas Maduro may be nearing an end as Venezuela reaches a breaking point after being ravaged by socialism. Maduro has declared that he will “defeat a coup,” and the military has his backing, but lacks the backing of nearly the entire international community.

Desperate to cling onto power, Maduro has declared his replacement Juan Guaidó a “puppet regime for the interests of the United States empire.” If we’re to take Maduro’s logic at face value, we’d have to believe that the hundreds of thousands of anti-government demonstrators in the streets are a secret cabal of wealthy people (in a country with a 90+% poverty rate) looking to advance American “imperialist” interests. Color me skeptical.

It’s no surprise why the citizens of a country where the average person lost nearly 20 pounds in 2017 alone are fed up with the status quo, and it doesn’t require any conspiracies about American meddling to explain it. While you’ll only really see claims resembling Maduro’s in state-run socialist news outlets such as TeleSur or among basement dwelling communists on Twitter, at least one member of our House of Representatives is echoing the rhetoric.

Myth 1: Venezuela’s Regime Change is a U.S. Backed Coup

Alexandria Ocasio-Cortez has built herself a reputation for skills in using social media to her advantage – and fellow socialist freshman Congresswoman Ilhan Omar is set to create the opposite reputation. Like Maduro, Omar claims that Trump is trying to install a far-right opposition that will destabilize the nation. To be honest, I’m not sure how Venezuela could possibly be destabilized any further. 

Plenty of right-wingers have long joked that phrases like “far-right” are used by the modern left to describe anyone to the right of Joseph Stalin, and that appears to be the case with Maduro’s potential replacement. Juan Guaidó is a member of the centrist/social-democratic Popular Will party, which is part of the Socialist Internationale.

With the support of Congress and the hundreds of thousands of Venezuelans across the country protesting, Guaidó has declared himself President until Maduro steps down and free and fair elections can take place. While Omar would like to present Maduro’s overthrow as American in origin, nearly the entire nation of Venezuela is rising up against Maduro, and virtually every country in Latin America has recognized Guaidó as the new President. One of the few countries that does back the Maduro regime is Russia – though I suppose mentioning that would disrupt another narrative.

It’s noteworthy that none of the so-called “Democratic” socialists in Congress (with the exception of Bernie Sanders) have denounced the Maduro regime themselves. Maybe that’s because “democratic” socialism isn’t so different from plain-vanilla socialism.

Myth 2: Venezuela’s Collapse Was due to Low Oil Prices, Not Socialism

Another common claim from socialists in denial is that despite the hellscape Venezuela has become, it’s not due to socialism, but rather because their economy was largely dependent on oil exports, and the price of oil began crashing in late 2014.

Oil exports account for 25% of Venezuela’s GDP. One can only then wonder why the citizens of Saudi Arabia aren’t starving in the streets too, given that a larger percentage of their economy is dependent on their petroleum sector. Oil exports as a percentage of total exports are also higher in Saudi Arabia. Similarly, while oil revenues account for upwards of 70% of Venezuela’s government revenue (when prices are high), they account for 85% of government revenues in Saudi Arabia.

Furthermore, Venezuela’s problems predate a crash in oil prices. Food shortages began in 2011 when Hugo Chavez was still alive and oil prices were at their peak, near $110 a barrel. Inflation also soared to nearly 30% that year, though that’s nothing compared to the incredible 1 million percent inflation seen in 2018.

Myth 3: Venezuela Isn’t “Real Socialism”

The claim that Venezuela isn’t “real socialism” can be debunked by simply pointing out that there wasn’t a single socialist complaining that Venezuela wasn’t “real socialism” before the nation’s failure was undeniable. In fact, Venezuela was praised by socialists and other leftists as a socialist success story pre-collapse.

In 2007 economics Nobel Laureate Joseph Stiglitz praised Venezuela’s economic policies, telling an audience that “Venezuelan President Hugo Chavez appears to have had success in bringing health and education to the people in the poor neighborhoods of Caracas, to those who previously saw few benefits of the country’s oil wealth.” “It is not only important to have sustainable growth,” Stiglitz later added, “but to ensure the best distribution of economic growth, for the benefit of all citizens.” They’re enjoying an equal distribution of poverty now.

Bernie Sanders re-published an article on his official Senate website that argued: “These days, the American dream is more apt to be realized in South America, in places such as Ecuador, Venezuela and Argentina, where incomes are actually more equal today than they are in the land of Horatio Alger.” Un-prophetically, the article concludes with the line “Who’s the banana republic now?” (Answer: Venezuela).

“Hugo Chavez declared the oil belonged to the ppl. He used the oil money to eliminate 75% of extreme poverty, provide free health & education 4 all,” tweeted documentary filmmaker Michael Moore in 2013. Socialist Labor MP Jeremy Corbyn wrote after Chavez’s passing “Thanks Hugo Chavez for showing that the poor matter and wealth can be shared. He made massive contributions to Venezuela & a very wide world.”

Noam Chomsky praised Hugo Chavez for his “sharp poverty reduction, probably the greatest in the Americas,” a compliment that Chavez returned by holding up a copy of a Chomsky book during a United Nations speech.

Perhaps the term “not real socialism” can be used synonymously with “failed socialism.”

AOC Attempt to Fact-Check the Fact-Checkers Fails Miserably

Back on the campaign trail, Alexandria Ocasio-Cortez often played naive when one of her gaffes was brought to light or challenged. Now with her newfound confidence as Representative she’s firing back against the fact checkers… with limited success.

Cortez thinks that the Washington Post’s fact-checkers have a vendetta against her, which is ironic considering that for every claim of hers they’ve fact-checked, the Post has analyzed thousands of claims from President Trump (many of which are nitpicking, such as “debunking” Trump’s hyperbolic claim that the thousand McDonalds hamburgers he purchased for the Clemson Tigers would stack a mile high).

Earlier in the month, Cortez fired back at the Post after they debunked her claim that the Pentagon had wasted over $21 trillion dollars – which is a greater figure than the cumulative defense budget since the founding of our Republic. Cortez responded not by challenging the correction but blasting the Post for not spending their time fact-checking Trump instead. At the time, the post had fact-checked 7,645 Trump claims, and Cortez twice. Cortez’s impossible Pentagon claim remains up on her twitter despite being mathematically impossible.

Another Day, Another Falsehood

The latest obviously-bogus Cortez claim that she’s attempting to defend is in regards to a living wage. Speaking to Ta-Nehisi Coates at Riverside Church earlier in the week, Cortez said that “I think it’s wrong that a vast majority of the country doesn’t make a living wage, I think it’s wrong that you can work 100 hours and not feed your kids. I think it’s wrong that corporations like Walmart and Amazon can get paid by the government, essentially experience a wealth transfer from the public, for paying people less than a minimum wage.”

The Post’s Glenn Kessler challenged the claim, first by addressing the statement that a majority of American doesn’t earn a living wage (which is interesting given the amount of living that seems to be going on right now).

  • In support of her statement, Ocasio-Cortez’s office first sent an article [to the Post], based on a United Way study, that said that nearly 51 million households — or 43 percent of households — “don’t earn enough to afford a monthly budget that includes housing, food, child care, health care, transportation and a cell phone.” That’s certainly a lot, but not a majority, let alone a “vast majority.”
  • The MIT Living Wage calculator says the living wage in the United States was $16.07 per hour in 2017, before taxes, for a family of four (two working adults, two children).  Ryan Nunn, an economics fellow at the Brookings Institution, has tracked the hourly wage distribution of full-time workers. He found that 67.7 percent of full-time workers earn at least $16.07 per hour, 61.9 percent of all workers (i.e., full-time and part-time) earn $16.07 per hour or more, and the median hourly wage for full-time workers is $21 per hour, and the median hourly wage for all workers is $19.60 per hour. In other words, about 32 to 38 percent of workers earn less than $16.07. That’s below the 43 percent estimate in the United Way report.

And note that this is before any transfer payments that workers receive from the government.

While I personally disagree, Kessler actually did rank Cortez’s statement that “I think it’s wrong you can work 100 hours and not feed your kids” are true, because a single mom with two children earning $7.25 an hour actually would have to work over 100 hours a week to earn a living wage. But remember, that’s not including any transfer payments (and child support payments) a single mom would unquestionably receive, and few people are actually in such a situation to begin with.

In 2015, only 11 percent of (working age) people in poverty worked full time. By contrast, 63 percent of those in poverty don’t work at all. Of full time workers in America, only 2 percent live in poverty (compared to 32 percent of the unemployed). If we look at those with families, the numbers become even more stark. For instance, in 2011 only 0.3 percent of families in poverty worked an hourly job earning the minimum wage. Poverty is a work problem, not a wage problem.

The last part of Cortez’s statement, that “corporations like Walmart and Amazon can get paid by the government, essentially experience a wealth transfer from the public, for paying people less than a minimum wage” needs some explaining. What Cortez is saying here is that because Walmart doesn’t pay workers a living wage, it’s up to the American taxpayer to subsidize the difference. Of course, Walmart would be paying the same wage independent of whether or not a welfare state exists, so this thought experiment is pointless. Furthermore, in a world where a welfare state does exist, would you rather subsidize someone earning $10 an hour at Walmart or an unemployed person earning $0 an hour? I think it’s obvious which would be cheaper.

Cortez Fights Back

Cortez is fighting back by criticizing one of the studies Kessler cited, even though she literally didn’t even read the first page of it, or accurately figure out who even published it. In the tweet below, Cortez blasts one of Kessler’s citations (the Mackinak Center) as a “Walmart-funded think tank.”

I didn’t mention the study that Cortez is criticizing in my criticisms of her because it’s not needed to debunk her claim – but to give some background, Kessler linked to a 2005 study from professor Jason Furman when talking about Cortez’s claims that businesses that Walmart are recieving a “wealth transfer” from the American public. In the statement “The standard incidence analysis used by the Congressional Budget Office, Joint Committee on Taxation and other researchers generally assumes all costs and benefits of labor-related taxes and benefits are borne by labor — i.e., the worker, not the employer. So wages would be largely unaffected if taxes went up or public assistance went up” Kessler hyperlinks to the Furman study. I’ll note that that entire paragraph could be removed from Kessler’s article and it wouldn’t change his article’s overall thesis.

Contrary to what Cortez says, the study was not “Walmart funded.” While Kessler’s citation linked back to the right-wing Mackinac Center, they were republishing the study (which they did not fund). Furman was the chairman of Barack Obama’s Council of Economic Advisers – and the 2005 study was authored by the left-wing Center for American Progress. Furman says he’s never even heard of the Mackinac Center. Cortez responded by completely ignoring that Kessler is a liberal who worked for Obama.

Regardless of Furman’s background, the fact that his study says on page one that “The author has never received payment from Wal-Mart of any kind” should’ve prevented Cortez from making such a criticism. Then again, I doubt she reads much.