Bernie Sanders' Economic Platform: Income Inequality Analysis
This paper examines Bernie Sanders' economic platform through a macroeconomic lens, focusing on his approach to income inequality and the declining American middle class. The paper evaluates key policy proposals including a federal infrastructure investment program modeled on Keynesian economics, a minimum wage increase from $7.25 to $15 per hour, expansion of Social Security and Medicare, progressive taxation on high earners and corporations, and opposition to free trade agreements such as the TPP and NAFTA. It also addresses the critical question of how such a broad benefits platform would be financed, and weighs Keynesian spending arguments against supply-side counterarguments regarding savings and investment.
- Introduction: The Core Thesis of Sanders' Platform: Sanders frames platform around income inequality and middle class decline
- Infrastructure Investment and Keynesian Economics: Federal infrastructure spending modeled on New Deal Keynesian economics
- Minimum Wage Policy: Benefits and Drawbacks: Raising minimum wage to $15 analyzed for benefits and economic risks
- Taxation as a Funding Mechanism: Progressive taxation and closing corporate loopholes as revenue sources
- Trade Policy and the American Middle Class: Sanders opposes TPP and NAFTA to protect domestic manufacturing jobs
- Macroeconomic Challenges and Competing Theories: Keynesian spending vs. supply-side savings debate applied to Sanders' plan
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What makes this paper effective
- It applies concrete economic frameworks—AD-AS modeling, Keynesian theory, and Standard Trade Theory—to evaluate real policy proposals, grounding political analysis in economic reasoning.
- The paper presents both the strengths and weaknesses of each Sanders proposal, demonstrating critical balance rather than advocacy or dismissal.
- It synthesizes multiple policy areas (infrastructure, wages, taxation, trade) into a coherent macroeconomic critique, showing how the proposals interact with one another.
Key academic technique demonstrated
The paper demonstrates effective use of a counterargument structure: for each major policy proposal, it presents the intended economic benefit, then introduces critiques from economists or competing theories (e.g., supply-side vs. Keynesian views on saving and spending). This technique strengthens analytical credibility and models balanced academic argumentation.
Structure breakdown
The paper opens by establishing Sanders' central thesis around income inequality, then moves policy by policy—infrastructure, minimum wage, taxation, trade—before concluding with a broader macroeconomic assessment. Each section follows a consistent pattern of proposal, justification, and critique, creating a clear and predictable argumentative rhythm that aids reader comprehension.
Introduction: The Core Thesis of Sanders' Platform
Bernie Sanders' economic platform is built on the concept of income inequality. As a democratic socialist, his central thesis is that the U.S. economy is generating wealth while simultaneously producing large and growing income disparities. His platform explores an interesting dichotomy: despite continuous increases in economic productivity over the years and tremendous advances in technology — advances that should theoretically reduce economic disparities — workers are compelled to work longer hours for the same or lower wages.
Sanders' approach is more complex than simply emphasizing economic disparities. He frames his platform around a transfer of wealth — not merely the existence of wealth gaps — between the middle class and the rich. As many observers note, the United States was built around the proliferation of a robust middle class, making this transfer of wealth a legitimate concern for voters. When addressing poverty, Sanders specifically emphasizes child poverty, citing UNICEF data indicating that the U.S. has the highest child poverty rate among developed countries at 32.2%, compared to the United Kingdom's 25.6%, the second highest on the list.
The cornerstone of Sanders' economic platform is therefore the revival of the middle class. He proposes several mechanisms to accomplish this, including major federal jobs programs, progressive taxation reform, trade policy changes, and significant expansions of social benefits.
Infrastructure Investment and Keynesian Economics
One of Sanders' primary strategies for reviving the middle class involves a major federal investment in infrastructure. He estimates that $1 trillion in infrastructure spending could create as many as 13 million jobs. This approach represents a return to Keynesian economics, successfully employed by Franklin D. Roosevelt during the New Deal. The plan targets investment in broadband, the electrical grid, water infrastructure, freight and passenger rail, public transit, bridges, and roads, with the aim of creating job opportunities for middle- and lower-class workers and thereby reducing income disparities. Sanders proposes to fund this initiative by requiring corporations to pay taxes on profits shifted offshore or earned abroad. Currently, U.S. businesses only pay taxes on foreign profits if those profits are repatriated. According to CNN, this policy costs the U.S. economy approximately $90 billion every year (Luhby).
The macroeconomic effect of Sanders' infrastructure plan can be illustrated using an Aggregate Demand–Aggregate Supply (AD-AS) model. The aggregate levels of demand and supply are currently represented by curves AD1 and AS1, respectively, at price level P1 and income level Y1. If Sanders' infrastructure plan is implemented, the government would collect approximately $90 billion more in tax revenue, giving it more to spend on public purchases. The level of aggregate demand would rise, shifting the aggregate demand curve from AD1 to AD2. This increase in demand would place upward pressure on the price level, prompting suppliers to increase output. Additional supply-side stimulus would come from the improved infrastructure itself, which would lower production costs and shift the aggregate supply curve outward to AS2, resulting in a lower price level and a higher income level Y2. Consumers would benefit from lower commodity prices, and the government would have additional revenue to direct toward improving quality of life for lower-income households.
Minimum Wage Policy: Benefits and Drawbacks
In addition to infrastructure investment, Sanders pledged to raise the federal minimum wage from $7.25 per hour to $15 per hour, phased in through 2020. This proposal is primarily aimed at reducing poverty across American society, with particular attention to child poverty. He also advocates for expansion of Social Security benefits, broad protection of the Social Security program, and consistent funding for Medicaid and Medicare.
A minimum wage increase of this magnitude would have substantial effects on both workers and businesses. Most directly, it would raise wages for more than 60 million workers currently earning less than $15 per hour (Williams). Higher wages would translate into greater disposable income and improved ability to meet basic living expenses. Businesses would benefit indirectly through the trickle-down effect of increased consumer spending among this population. Additionally, higher wages could improve worker productivity and reduce stress-related costs, offering further economic benefits (Williams).
From a cost perspective, however, Sanders' wage inflation proposal carries significant risks. Wages would need to rise not only for those currently earning below the new minimum but across the wage spectrum, in order to maintain the skill-pay differential that makes career advancement worthwhile (Williams). This would increase the cost of doing business, potentially compelling employers to cut jobs or hours, or to raise commodity prices to offset increased labor costs (Williams). Either outcome would undermine Sanders' goal of empowering the middle and lower classes. A secondary concern is that a dramatically higher minimum wage could reduce the incentive for current minimum-wage workers to acquire new skills and advance their careers.
Economists caution against implementing such a large minimum wage increase at the national level without carefully examining its consequences (Williams). A more prudent approach, some suggest, would be to observe whether the policy is working in cities such as Los Angeles, San Francisco, and Seattle — which have already enacted similar increases — before applying it nationally (Williams).
References
Luhby, Tami. "Free College and Healthcare for All — How Would Bernie Sanders Pay for It?" CNN Money. Web. 2015.
The National Tax Foundation. "Tax Topics." The National Tax Foundation. Web. 2015.
Tully, Shawn. "Why Savings Stimulate More than Spending." Fortune Magazine. Web. 2015.
Williams, Sean. "Bernie Sanders' Plan to Raise the Minimum Wage Has Plenty of Flaws." Business Insider. Web. 2015.
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