Is Joe Biden a Socialist?

​President Trump and the Republican Party are doing their best to label Joe Biden as a socialist. This has become a prominent message coming out of the Trump campaign. Donald Trump has called Joe Biden a “Trojan horse for socialism”, and Biden’s “socialist agenda” was the republican’s favorite boogeyman at last summer’s convention. So, is Joe Biden intent upon unleashing a socialist agenda, bringing down capitalism and altering the American way of life? It all depends on your definition of socialism. Let’s take a closer look at socialism and whether or not Joe Biden’s agenda fits the definition. 

​Socialism:   Various forms of socialism have been around for centuries. Socialism as it is now understood, emerged in response to the extreme economic and social changes experienced by the working class during the Industrial Revolution.  Wealth disparities grew and working conditions deteriorated during this period.

 ​ Socialism is an economic and political system based on public ownership of the means of production, which includes the machinery, tools, factories, and natural resources to produce the goods required by society .(https://www.investopedia.com/terms/s/socialism.asp). Under socialism, individuals can still own property, but industrial production, natural resources, and infrastructure are communally owned and managed by a democratically elected government (the exception being communist countries that have authoritarian central governments). Any surplus or profit from these communally owned resources benefit the citizens.
 
In a pure socialist system, all property is communally owned, a strong central government controls the economic production of goods and services, and provides citizens with their basic necessities including food, housing, medical care and education. The government essentially redistributes wealth and narrows the gap between rich and poor. There are no modern-day countries that have a pure socialist system. Cuba and China have strong elements of socialist market economies. These are actually mixed economies, where private enterprise and free markets are contributing more each year to the overall economic output.  In China, privately owned companies generate from 33% to 70% of the GDP. In Cuba approximately 20% of the workforce is engaged in private enterprise. China is thriving principally because of its embrace of capitalism and the development of a market-based economy. Countries such as Venezuela and North Korea, which cling to their stringent socialist models, are economic failures and their citizens are suffering mightily.

Most countries have mixed economies which contain some degree of capitalism and a number of socialist policies. The United States has a capitalist economy, controlled by government regulation, and backed up by entitlement programs. Free public education, Social Security, Medicaid and Medicare are all considered socialist programs. When enacted, these programs were considered very controversial, and there was concern that they would lead the country down the road to socialism. But can you imagine doing away with these programs today?

Social Democracy: Many consider Norway, Sweden, and Denmark to be socialist countries, but they are not. They are social democracies. Social democracies have free market economies paired with high taxes to support generous government entitlement programs. Individuals and corporations own a significant portion of the capital and means of production. Democratically elected governments redistribute wealth through high levels of taxation and strict regulations on labor and capital. In return for high taxes, most citizens are entitled to free education (through university), universal healthcare, subsidized childcare, subsidized housing (in some cases) and generous pensions. This system works well in the Scandinavian countries because there is a high level of trust in the government and government institutions. Distrust of the government in the United States is high, and therefore most citizens take a dim view of high taxes and wealth redistribution.

​Joe Biden’s Policy Proposals: I view Joe Biden as a moderate democrat. In an effort to unify the party he has had to move further to the left to appease some of the progressives (Bernie Sanders). Some of Biden’s policy proposals call for big spending. So does that make him a socialist? Not according to the previous discussion on socialism. Let’s examine some of Joe Biden’s proposals that the republicans claim will lead us down the road to socialism:

• Healthcare: Contrary to what had been said during the Republican National Convention, Joe Biden does not support “Medicare for All”. This proposal would eliminate private health insurance companies in favor of a single-payer system. Biden’s plan focuses on strengthening “Obamacare”, maintaining employer-based and private insurance, and developing a new, more affordable public option. The public option will be administered by Medicare and be available to all Americans. Biden’s plan is by no means British style socialized medicine. Far from it. If you want an example of socialized medicine closer to home, take a look at the Veteran’s Health Administration, where all hospitals and clinics are government owned, and most of the employees work for the government. (www.va.gov).

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• Empower Workers: The Biden plan seeks to encourage and incentivize unionization and collective bargaining, ban noncompete rules, and end wage secrecy rules. Biden also proposes to increase the federal minimum wage from $7.25 to $15.00/hour (it is unclear over what period of time). Many states have already begun to increase minimum wages beyond the federal minimum.
• “Made in All America” by American Workers: This is a $700 billion procurement and investment program over four years.
  • $400B is to procure American products and services, improve supply chains for critical products, and support small businesses.
  • $300B is to invest in research and development and breakthrough technologies, such as electric vehicle batteries, 5G, high tech materials, and artificial intelligence.
• Investments in Education:
  • Tuition free public colleges and universities for all families with incomes below $125,000.
  • Undergraduate Federal Student Loan support: payments begin once the recipient begins making over $25,000/year, and then at a rate of 5% of discretionary income.
  • $10,000/year of student loan forgiveness for up to five years for those who take critical public service jobs.
  • Provide all 3- and 4-year-olds access to free, high quality pre-kindergarten education.
• Infrastructure Spending: Biden proposes to spend close to $2 trillion dollars on much needed infrastructure projects. These include upgrades to bridges, roadways, water systems, power grids, building upgrades, new housing and green energy projects.   

Tax Proposal: Joe Biden plans to pay for these proposals by raising 3.35-3.67 trillion dollars over a decade, through tax reform. This plan will increase taxes on corporations and individuals making over $400,000/year. Here are some of the highlights of Biden’s tax proposal:

• The top corporate tax rate will increase from 21% to 28%.
• The 12.4% Social Security tax will be levied on all incomes above $400,000. Currently only incomes up to $137,700 are subject to the Social Security tax.
• The capital gains tax rate for those who earn over one million dollars will be the same as the tax on ordinary wages.
• The top individual tax rate will increase to 39.6%.
• There will be a minimum 21% tax rate on all foreign earnings by U.S. companies.

A comprehensive list of all of Joe Biden’s policy proposals can be viewed at his website: (https://joebiden.com/joes-vision/#).

​Many of Joe Biden’s policy proposals look like big government tax and spend programs. But on closer inspection they are really long overdue investments in America. Both political parties have argued that a big infrastructure bill is needed. I can think of no greater investment in our future than in education. Giving people the tools that they need to work and thrive makes them less dependent on the government, not more. In my view, smart investments in people, infrastructure, and American jobs, will pay dividends well into the future. Spending on small businesses, private sector jobs, green technology, and required infrastructure upgrades, is anything but socialism. 

​Make no mistake, it doesn’t matter which political party is in office, government spending is massive and it will only get larger. The political parties just have different priorities for that spending. Even during a roaring economy, annual budget deficits under Donald Trump reached one trillion dollars, and that was prior to the start of the pandemic. (https://www.forbes.com/sites/chuckjones/2020/02/01/trumps-deficits-are-racing-past-obamas/#380f76348199). At least Joe Biden is prepared to increase taxes to pay for his budget priorities. The republicans fool themselves into thinking that tax cuts will “starve the beast” and force lower government spending. In reality, the deficits and debt march steadily higher. High budget deficits to support low taxes might be an effective reelection strategy, but it is a disastrous long-term strategy. The president has already passed trillions of dollars in legislation to get the crippled economy going again, and he will pass legislation to spend trillions more in the coming weeks. That doesn’t sound like a laissez-faire, free market economy to me. So be careful who you label “socialist” Mr. President. 

​Joe Biden’s overall policy package is not socialist. It calls for a lot of government spending, but it is mostly offset by eliminating President Trump’s tax reductions of 2017. Many socialist democracies around the world are thriving because they have found a balance between high taxes and the services that the citizens want.  This country wants the benefits of a social democracy but is unwilling to pay for them. At least the democrats are more honest about it than are the republicans.     

 
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Thanks,
Armchair American