Thursday, June 28, 2018

28-Year Old Democratic Socialist Beats The Dem Establishment & Explains How Medicare For All Is Feasible

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Dems' latest Wunderkind, Alexandria Ocasio-Cortez,  who won big in New York's 14th Congressional District.
As a Democratic Socialist - member of the Democratic Socialists of America  myself- I was elated on learning Alexandria Ocasio-Cortez  - who knocked off a 10 term establishment Dem- is also a member.  Incredibly, Ocasio-Cortez was working behind a bar 9 months ago and had helped start Flats Fix, a tacos and craft cocktail spot in Manhattan, before launching her political career.  We're now aware that  the  outcome has been to send Rep. Joseph Crowley down to defeat and an early, unexpected retirement.  Heck, maybe he can get a new gig as a D.C. lobbyist.

That was despite the Dem establishment's candidate having an 18 to 1 advantage in campaign spending.   An 18 to 1 advantage and Crowley lost by 57% - 43%,  which is not exactly close.
In May, encouraged by the activists she’d been working with,  including a group from the Democratic Socialists of America, the 28-year-old Ocasio-Cortez filed to challenge Crowley to represent New York's 14th Congressional District.
Most of her limited $300,000 in campaigns funds were spent on bilingual posters, which she said were designed to look “revolutionary," and her viral campaign video, created by a socialist team called Means of Production.   I suspect it was the video which had most impact.
Wifey had informed me of Ocasio-Cortez's upset win the night before, but my initial reaction (before I even learned she was a DSA member)  was more or less ho-hum: Another newbe woman, ousting an old line Dem (likely in hock to lobbyists) and maybe just a flash in the pan. So what's new?
Yesterday morning all that changed when I watched her interview on 'Morning Joe' and beheld a lively,  intelligent and articulate woman who was super confident and could summarize her basic message in 30 seconds. (As co-host Mika Brzezinski put it: "Take note, Dems! You need to reduce your two to three minute messages!")
What most impressed me was how she answered Willie Geist's question of how she would pay for a  “Medicare for All” program, not to mention massive forgiveness of student loan debt.   Geist said those sounded like "endless wrapped Christmas  gifts". She didn't miss a beat and said we needed to re-examine those tax cuts which had created a $1.4 trillion deficit and went mainly to corporations and the wealthiest.  She emphasized that $400 billion of those giveaway cuts could have forgiven all the existing, outstanding student loans in default.
She said all that was needed is the political courage to act.  Of course, that is where the proverbial  bear sits with his buckwheat. 
For some time now I have been hammering on the tax issue and explaining how all the programs regarded as "pie in the sky" by the Right and Dem Neoliberals  -  from Medicare for all, to free college,  to expanding Social Security-   can be achieved by re-ordering priorities.  To attend to all of these, Ocasio-Cortez' solution of redirecting tax cut money is basically correct, as I had earlier brought up the German model, i.e. where budget surpluses are plowed back into the commons and used for social insurance enhancement.   See e.g.

The question posed in the post header was 'Do Americans Really Want Big Government?'  And the answer embodied in Ocasio-Cortez' model is that they do.   In the link above I cited Germany as an example nation, where our long time friends Reinhardt and Elli live, adding:
 "Germany has among the highest taxes in the world and a habit of heavy state spending."
But can most Americans live with that?  Because for sure what Alexandria is proposing are not freebies, nor can they be paid for merely by redirecting tax cuts. No, because the tax cuts themselves need to be halted entirely so as not to create added deficits - which the scoundrels of the Right will use to cut existing programs.
Thus, it is critical to not only deep six tax cuts, but to increase tax revenues. As Megan McCardle recently put it in a Denver Post op-ed ('What's Really Obstructing Left Wing Dreams'):
"The American Left has developed a fantasy that a large expansion of the welfare state can be financed by taxing only the rich....In fact European welfare states pay for themselves by taxing ordinary people very heavily."
How heavily? UP to 40- 45% in Germany even higher in Denmark, Sweden. McCardle references the top tax bracket would kick in at $45,000/ year if we adopted Scandinavian standards.  But then those nations enjoy vastly superior civilized care levels, as opposed to survival of the fittest mandates. See e.g.

For sure, current American marginal tax rates - certainly for the three middle income quintiles- would need to go up dramatically. (It is likely the best policy to leave the lowest quintile alone and eligible each year for the earned income tax credit). The least tax rate for the next quintile would be 25 percent, and graduating from there to 45 or 50 percent. Say, for $75,000 - 100,000 earners.  (High earners would take 50- 75% tax hits, in proportion to their total incomes, including investments)

Where McCardle is correct is that it's preposterous that we can fund every proposal by "grabbing the same few pieces of high income tax capacity".  No, most sensible people - even Democratic Socialists - realize that's not possible. Which was why many of us strenuously objected extending the Bush tax cuts for the middle class. E.g.

Over many separate posts I had noted that respected sources including The Financial Times had repeatedly pointed out that merely taxing the rich could not support social programs.   And that's absolutely correct. Even the Repukes know higher taxes are the life's blood for preserving Social Security and Medicare, which is why they are always ready to cut them after passing giant tax cut packages.  This isn't rocket science.

Where McCardle is wrong is in asserting we are daft to want to eliminate the cap (FICA) on Social Security taxes.  No, my argument - and I would hope Ocasio-Cortez'-  is that we need that elimination because the existing system benefits mainly the wealthy who don't need Social Security income.  Besides, if taxes are raised to German or Scandinavian levels, Americans need to be able to depend on expanded Social Security benefits - which eliminating the FICA cap would provide. 

But again, are Americans willing to go this route. According to WSJ columnist William Galston ( 'Americans Want Big Government') they are.  Galston cited a poll that showed  58 percent of Americans (the "highest share ever recorded")  agreed that:

"the government should do more to solve problems and help meet the needs of people"

In addition, Galston cited a Pew research poll from last April which showed that for the first time in eight years:

"Americans favored a larger government offering more services over a smaller government providing fewer services."  

This is all very commendable but many of us who are Democratic Socialists also want to see  how our fellow citizens react when faced with actual tax increases on a German or Scandinavian scale.

I believe both Alexandria Ocasio-Cortez and I can agree that the jury is still out. I, for one, am not yet convinced most Americans can break free of their addiction to tax cuts.

See also:


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