Friday, July 10, 2020

Bernie Sanders and Basic Economics: Still Miles Apart

You have to have a certain level of mental maturity to grasp economics. Unfortunately, some people – like Sen. Bernie Sanders (I-VT) – never get it.

A tweet from the 2020 White House hopeful shows that despite his advancing years, good ole’ Bernie would struggle to pass high school economics.

Andy Puzder, writing for Fox News, explains:
 

In a recent tweet, presidential candidate Bernie Sanders confused the basic economic concepts of revenue and profit. Sanders tweeted that “[t]he video game industry made $43 billion in revenue last year. The workers responsible for that profit deserve to collectively bargain as part of a union.” Of course, the $43 billion was revenue, not profit – and there is a difference.

 

Profit is what’s left after a business pays the costs of generating revenue. Sanders’ failure to understand this difference highlights the biggest problem with his entire economic agenda – it depends on ignoring costs.

Profit is an intuitive concept. As a boy growing up in a Cleveland suburb in the 1950s, I quickly realized that what I charged to cut our neighbors’ lawns (my revenue) had to exceed my costs – such as what I paid for gas for the lawnmower — or I would have no cash left over (my profit) to purchase a new baseball mitt or fishing rod.

When I was working my way through law school, my wife and I often had to juggle bills so that, at the end of the month, we didn’t run out of money.  Our earnings mattered, but so did our bills.

Unfortunately, Sanders has spent most of his career in D.C., where he can spout off like a Brezhnev-era apparatchik with no repercussions.

However, America isn’t ready for the bill. 

Vox calculated the big-ticket items on Sen. Sanders’ wish list (single-payer health care, guaranteed jobs, and free college) from the left’s most revered sources and found they would cost $42.5 trillion over the next decade, on top of a $12.4 trillion baseline deficit.

RealClearPolitics’ national polling average of the Democratic presidential nomination has Sanders in second place, behind former Vice President Joe Biden.

AAN Staff
AAN Staff
The staff at American Action News are consummate professionals, who when not producing original, hard-hitting content, are scouring the internet to bring you the unfiltered news that matters to you! Our mission is to maximize your experience on our website. If we can ever be of assistance, please do not hesitate to let us know!

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