NASA defines black holes as “a great amount of matter packed into a very small area … the result is a gravitational field so strong that nothing, not even light, can escape.” That makes Sen. Elizabeth Warren, D-Mass. is the candidate of fiscal black holes.
To borrow from NASA’s definition, Warren proposes “a great amount of spending from a finite resource pool … the result is a threatened fiscal calamity so strong that nothing, not even Alexandria Ocasio-Cortez could escape it.”
I only slightly exaggerate. After all, the 2020 candidate’s spending plans are now nothing short of extraordinary. Take the senator’s newly announced child care plan. It would provide free child care to families earning under 200 percent of the federal poverty level, and would cap child care costs at 7 percent of household income for all other families. Rather than making child care cheaper by reducing provider barriers to entry, requiring simply criminal background checks rather than expensive qualifications, Warren simply wants the government to pay the bills.
That’s a problem because Warren’s program will almost certainly cost more than $1 trillion over 10 years — Warren’s advisers say its cost is $700 billion, but they use very creative accounting methodology. Yet, the real problem with Warren’s plan is that it adds a litany of other expenditure explosions: The senator also supports government-funded healthcare, student loan forgiveness, and the Green New Deal. Collectively, this would cost tens of trillions of dollars over 10 years. But, while Warren says the wealth tax will pay for it, her own advisers say differently. They suggest that the wealth tax would only raise around $3 trillion over 10 years, for a more accurate number reflecting capital tax avoidance, try dividing $3 trillion by five.
Don’t get me wrong, I recognize that Republicans are no saints when it comes to fiscal rectitude. Although the GOP tax cuts are generally good policy, and Trump’s necessary defense spending hikes are necessary, the GOP wrongly ignores entitlement reform. But Warren’s plan is a plan for wealth evacuation, interest rate inflation, and structural economic stagnation.
As I say, Warren is to fiscal health what black holes are to light: annihilation.
