The Dangers of Alexandria Ocasio-Cortez

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It is fortunately not very often that a self-proclaimed socialist wins elections in the United States, but when such an event does happen, it is a terrible loss for the foundations of American society. Several weeks ago, Alexandria Ocasio-Cortez victoriously nabbed New York state’s 14th congressional district in the Democratic primary against incumbent Joe Crowley. Since her surprising victory, Ocasio-Cortez has engaged in nationwide conversations about the benefits of socialist policies, including advocating for a single-payer healthcare system, job guarantees, and government-provided affordable housing. Her beliefs are not only wrong on the economics, which time and again has shown that free markets and capitalism do a better job of lifting populations out of poverty than a central planner ever has; her popularity is concerning and arguably dangerous, as many people of her generation support her and forget how socialist systems have historically led to famine, mass murder, and the devastation of countries.

We examine three of her policy proposals to show that not only are they incorrect, but also to remind everyone that capitalism has helped millions of people, and we should not be taken in by the socialist tendencies of politicians like Ocasio-Cortez.

Policy #1: Healthcare should be a basic right, and the government should pay for it

One of the cornerstones of the Democratic Party in the last few years has been this idea that America should follow in the footsteps of every other developed country in providing its citizens with universal healthcare.

Democrats and Ocasio-Cortez truly believe that single-payer healthcare systems are better than anything the free market could come up with, and point to the enormous costs of American medicine as proof. Yet universal healthcare is its own disaster, evidenced by the dramatic failure and runaway costs of Medicare in this country. Medicare arguably functions like a single-payer system, acting as a monopoly on health coverage for seniors. The result of Medicare’s low reimbursement policy is a decline in the quality of medicine, as there are simply not enough funds to pay for high-quality service and product. Seniors are held captive by Medicare, which not only dictates what services they can and cannot receive, but in some cases forbids them from using private insurance to pay for better-quality service.

In addition, since its inception, Medicare has seen a stratospheric rise in costs and the burdens it places on taxpayers. It accounts for 15 percent of annual federal spending, and its growth rate is the fastest out of any of the programs paid for by the federal government. By 2023, total spending on Medicare is forecasted to reach over a trillion dollars, double the spending of only six years ago, in 2012. In addition, the trust fund for Medicare Part A is forecasted to completely run out by 2026. Seniors, and the American population in general, literally cannot afford to continue on with this experiment in socialized medicine. It is time to let the markets attempt to fix the problem.

Policy #2: The federal government should provide everyone with high-quality employment that pays at least the minimum wage

According to Ocasio-Cortez, a Federal Jobs Guarantee should be set up to make sure that every American has a job that pays the minimum wage. The minimum wage approach to jobs has already been discussed and discounted in a separate article, and the jobs guarantee fails on similar terms. When a job is created simply to create a job, the economy suffers. Because those jobs will not be created in the private sector, which has to adhere to a cost-benefit analysis in employment to be profitable, these extra jobs necessarily have to come from the government.

We’ve seen what happens when the government tries to provide a job for everyone.

The entirety of the 20th century experiment in many socialist countries, including the Soviet Union, was an uncharacteristic failure. The devastation of countries that adopted planned economies has, to this day, still persisted. The fall of the Berlin Wall was a blessing for East Germany, residents of which were three times poorer than their neighbors in West Germany. But even today, the former East Germany is still significantly poorer than former West Germany, showing that even after several decades have passed in a market economy, a region still cannot successfully shed its central planning roots.  Ocasio-Cortez’s jobs guarantee has been tried, and historically has never succeeded, instead forcing the countries that adopt it into a state of low growth that appears to be permanent.

Policy #3: Moving beyond capitalism

In a now-infamous statement made by Ocasio-Cortez last week in an interview with PBS, she suggests that “capitalism has not always existed in the world, and it will not always exist in the world” as an explanation for why American needs to move beyond capitalism.

While it is true that capitalism has not always existed, what should really terrify citizens is the last part of her statement: that capitalism will not always exist. The original liberal idea of free markets has performed the closest thing the world has ever seen to an economic miracle.

Over the past 25 years, since the fall of many communist and socialist regimes, the world has witnessed a significant fall in income inequality and poverty thanks to capitalism. Living standards have risen. Growth and innovation have been spurred. The American dream is alive and well because of the economic freedoms we enjoy in this country, which include the freedom to pursue our passions without the government telling us we cannot.

Ocasio-Cortez does not understand that it is because of capitalism that we can enjoy all the advantages we have, and the day that countries do away with capitalism is the day civilization itself will suffer. There are legitimate debates to be had about how to broaden capitalism to help even more people, but they all start with the idea that capitalism has done well for society. We should never forget that.

The primary win of Alexandria Ocasio-Cortez sets a dangerous precedent for politics and for society. Socialist policies have destroyed countries and people whenever they have been tried historically. We need to remember that our very way of life is a result of the success of capitalism, and we must elect a new generation of politicians that understand that. We cannot live under the regime Ocasio-Cortez and her hero Bernie Sanders have in mind for America.

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Jenny Grimberg

Jenny Grimberg is an economist at a financial firm in NYC. She holds a Masters degree in Applied Economics from Georgetown University, and a degree in finance from NYU. Prior to her current role, Jenny was an economist for the White House, working on infrastructure reform and cryptocurrency regulation. During her time in college, Jenny developed a passion for policy and politics, with libertarian leanings on most political issues. She decided to moved to Washington, D.C. to pursue a graduate degree that would allow her to begin a career in public policy, focusing specifically on monetary policy and financial regulation. She believes that the less government gets involved in the economy and the lives of its citizens, the better for society in the long run. She is also very passionate about the issues of drug liberalization, school choice, and gun control, believing that government has no business dictating how its citizens should live so long as they are not harming anyone else in the process. For fun, Jenny loves to travel whenever she can. One of her dreams is to take a road trip through every state in the United States. So far, she is up to 18 states. Her favorite road trip so far has been along Highway 1 in California. In her free time, Jenny can be found planning her next trip, reading, and visiting the zoo.