Earlier this week Sen. Elizabeth Warren said that an economic crash is right around the corner. She’s right. But it’s her own plan that would bring about the collapse she’s predicting.
Warren says that she sees all the signs of a “coming economic crash” that she — and she alone, apparently — saw before the 2008 financial crisis.
Let’s leave aside the dubiousness of Warren’s self-proclaimed economic forecasting abilities, and the fact that Democrats have been predicting an economic calamity since November 2016.
Here’s her central point:
“The country’s economic foundation is fragile. A single shock could bring it all down,” she proclaimed. To emphasize the point, she made it again. “With a vulnerable economy, we should be reducing the odds of potential shocks that could push us into a downturn.”
If that’s true, then Warren should abandon her entire economic plan. It is rife with massive self-imposed shocks that would destroy one entire industry, throw millions out of work, double the size of the federal government, raise taxes to unheard-of levels, and give Washington effective control over corporate decision-making.
Even though the economy isn’t as fragile as Warren says, the combined impact of her plan would break it into a million pieces.
Look at just a few of the shocks she has planned.
Warren was one of only four Democrats to raise their hands when asked at the first presidential debate whether they would eliminate private insurance.
That alone would throw roughly 2.4 million people out of work — 834,000 who work directly in the industry and the additional 1.6 million who work in jobs dependent on private insurance. That’s why Medicare for All has to set aside billions of dollars in “transition” funds in an attempt to soften this shock.
This is to say nothing of the vast amount of wealth that would be vaporized when the government drives private insurers out of business. The five biggest health insurance companies have a combined market capitalization of more than $200 billion.
Warren is also on board with a federally mandated $15 minimum wage, which the Congressional Budget Office figures would kill another 1.3 million jobs.
The Warren-backed Green New Deal would eliminate more than 5 million jobs, and that’s just counting the impact of carbon taxes, according to a new analysis from the Heritage Foundation.
Oil industry jobs would take an instantaneous hit, since Warren promises an immediate ban on drilling on federal lands. And the GND, of course, envisions wiping out the oil and coal industries entirely.
Warren also wants to bring the disastrous Dodd-Frank banking regulation back to full strength, even though we now know that it starved access to capital, destroyed small business growth and, as much as anything else, was responsible for the historically lousy economic recovery after the last recession.
Then there are the other shocks Warren wishes to inflict on the economy. She wants to confiscate nearly $3 trillion over 10 years through a “wealth tax” on anyone with a net worth of $50 million or more. It’s an idea that many other countries have already tried, and one they abandoned when they realized that it’s impossible to administer and is terrible for economic growth.
As the Mercatus Center’s Tyler Cowen has noted, Warren’s wealth tax would “lower investments in human capital and the creation of new businesses.”
In other words, it’s another job-killing economic shock.
Add it all up, and you have an economic crisis all right. One designed and engineered by a leading Democratic candidate for president.
— Written by John Merline
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