Presidential hopeful Sen. Bernie Sanders, I-Vt., is once again proving that it’s easy to be a democratic socialist. All you have to do is make wildly unrealistic promises and blame rich people for the world’s problems.
After that, most of the left-wing media will fawn all over you for your “revolutionary” and “innovative” thinking—no matter how foolish the policy proposal might be.
Sanders’ newest idea is to have government build “millions” of new housing units to help improve access to “affordable” housing.
“When I talk about infrastructure, I’ll tell you what else I’m talking about: The need to build millions of new units of affordable housing,” Sanders said at a rally on Wednesday in Reno, Nevada. “All over this country, you have people paying 40, 50, 60 percent of their limited incomes in housing. That is absurd. Let’s put people to work, with good wages, to build the affordable housing this country needs.”
There’s no denying housing and rent prices are high in some parts of the United States, especially in many high-tax cities, where developers are forced—usually by Democratic Party-led governments—to pay exorbitant fees and comply with mountains of red tape to build new housing units, if they are allowed to do so at all. But saying the best solution to bringing down housing costs is to build millions of new houses is utterly ridiculous for several important reasons.
First, there are already millions of vacant homes and apartments available across the country. Adding millions of new buildings would make it even harder for those looking to sell their homes or apartments to find buyers or tenants.
Sanders suggests that one of the benefits of his proposal would be that it would help “put people to work,” but in reality, it would merely take money away from other parts of the economy in the form of taxation and force people to pay for something the market is already providing.
Second, there is absolutely no money available for another massive, costly government program. The federal government is expected to run a $900 billion deficit this fiscal year, and the national government is currently $22 trillion in debt. Even if we assume by “millions” of new housing units that Sanders means just three million new housing units, his plan would likely cost more than $300 billion (assuming a conservative figure of $100,000 per housing unit)—more than one-third of the budget deficit recorded in the 2017–18 fiscal year.
Third, it’s a fallacy to say these new homes would be “affordable.” Although Sanders’ plan would reduce housing prices for some lower-income people, it would require raising taxes by hundreds of billions of dollars to cover the expenses. Contrary to the seemingly popular belief in the Democratic Party, money doesn’t simply fall from the sky.
Even if the revenues required are taken only from the wealthiest Americans and businesses, it’s extremely likely everyone would be forced to pay much of the costs in the form of higher prices for goods and services imposed by businesses and business owners to offset losses. There’s absolutely no reason to believe wealthy individuals and businesses will choose to pay higher taxes without passing along their costs through higher prices.
Further, other Democratic presidential candidates and Sanders have already called for creating dozens of other new government programs that would also require hundreds of billions or even trillions of dollars in new tax revenues. For example, the Green New Deal, which Sanders co-sponsored in the Senate, would cost tens of trillions of dollars in just the first decade. America’s billionaires literally do not have enough money to pay for even half the cost of the Green New Deal in just the first 10 years, so how does Sanders expect them to pay for this policy program too?
Fourth, rather than encourage people to move out of poverty, Sanders’ plan would incentivize Americans to remain impoverished. If you knew you could get access to brand-new housing for a fraction of its market price by remaining in poverty, why would you try to move out of poverty?
Fifth, Sanders suggested that one of the benefits of his proposal would be that it would help “put people to work,” but in reality, it would merely take money away from other parts of the economy in the form of taxation and force people to pay for something the market is already providing. So, while some parts of the economy would be improved by Sanders’ plan, numerous other parts would be greatly harmed in the process, and the net impact on the total economy would be negative, because hundreds of billions that could have been spent to innovate and expand businesses would be wasted on building new houses.
There’s nothing indicating America needs a huge new public housing plan, but that doesn’t matter to Sanders, whose only two interests are dramatically expanding the size and power of government and winning the presidency in 2020.