Even this comparatively modest combination of more middle-class entitlement spending and higher taxes would probably add to the national debt when it needs to be decreased, reduce incentives for entrepreneurship and investment when they should be strengthened, decrease the U.S.’s international competitiveness and slow economic growth.
Concern about Sanders does not mean that Trump’s record of economic stewardship has been stellar. The president’s 2017 corporate tax reform should still lead to stronger investment, higher productivity and higher wages. But the paralyzing uncertainty from his trade war has frozen investment spending in spite of strong new incentives. His refusal to reduce projected spending on Social Security and Medicare compounds the problem of high debt and deficits—a problem worsened by his tax cuts. And as I noted last Monday, his tariffs have not only hurt the overall economy, they have reduced manufacturing employment as well.
It’s important not to exaggerate any president’s influence on the economy, which is shaped by powerful global forces—peace, turmoil, technology, migration, geography—and by the daily, individual decisions of millions of households and businesses. But Trump and Sanders both stand to move the economy over the longer term in ways conventional presidents would not. Each would expand—in a damaging manner—the limits of permissible presidential stewardship. In many ways, these potential longer-term changes to the foundations of the U.S. economy and society seem most critical when comparing the two.
Trump has offered support to white nationalists on several occasions. That’s an economic problem as well as a social and moral one because social stability is necessary for prosperity. His support for protectionism and attacks on the post-World War II liberal international order directly threaten prosperity in a way that, if sustained, could persist by changing perceptions of the U.S. abroad.
By weakening the rule of law and the culture and norms reinforcing it, Trump has eroded the foundations of a strong economy. By attacking institutions — for example, labeling the Federal Reserve chairman as an “enemy”—Trump weakens public confidence in them. And the president’s hostility toward immigrants threatens the U.S.’s place as the global destination for many of the world’s best, brightest and most ambitious people.
Sanders would normalize democratic socialism. As my Bloomberg Opinion colleague Ramesh Ponnuru has pointed out, in the U.S., socialism “has been an accusation, not a boast.” A Sanders presidency, even if legislatively ineffective, would change the boundaries of which policy ideas are considered extreme. It would move the policy debate—and, over the longer term, the shape of actual policy—considerably to the left.
It would bring a class warrior into the Oval Office, sending a corrosive message that the government aims to punish success and is willing to use legislation and executive action to do so. The senator’s position is clear:
“Billionaires should not exist.” This is exactly the wrong message. A president should be rooting for more billionaires to exist. Sanders would be trying to make society more just and fair. But he would do the opposite.
Sanders’s default view is that the government is the solution to any problem, and by being so eager to redistribute income today, he endangers the future generations that would pay for his programs through slower economic growth. This change in the relationship between the individual and the state would reduce economic dynamism, dampen risk-taking and sap the energy of workers and businesses.
On balance, Sanders is the more significant threat to the U.S. economy, in part because the damage he would inflict is likely to be more difficult to reverse.
But here’s my real conclusion: The U.S. deserves a better choice.
This article was provided by Bloomberg News.