Andrew Yang has some radical ideas on how to fundamentally reshape the American Economy. It was fun at first, but since he’s been gaining steam, I thought it’d be prudent to take him on his word and #dothemath.



For the purposes of this article, we’re going to ignore the fact that Yang would have to get his policy proposals through congress. We’ll just pretend that he’s elected Supreme Dictator and can enact his policies automatically overnight.



Let’s start with his marquee policy: The Freedom Dividend. The concept of Universal Basic Income is not a new idea. In fact, its origins can be traced back as late as the 1500s. But he’s the first US politician to make it the major pillar of a presidential campaign.



The Freedom Dividend would transfer $1000 each month to every US citizen over the age of 18. Every single US adult would receive $12,000 a year regardless of income or employment status.



The trade off is that if you already receive welfare benefits, you can opt to keep them in lieu of the cash dividend. The idea is that the dividend would be a more efficient and fair transfer of wealth compared to our current welfare system. If you exclude Medicaid, the current system costs about $340 billion annually.



Yang states that this would take effect immediately upon him entering office, somehow. More on that later.



So let’s do the #math. I’m going to do some rounding, for the sake of simplicity. As an act of good faith, I’m going to round up or down in an effort to benefit Yang’s claims. If you have any doubts, then by all means, #dothemath yourself.



For reference:



2018 Federal Spending: $4 trillion

2018 Federal Revenue: $3.3 trillion

US Adult Population: 253 million

Total Annual Dividend: $3 trillion

Alright, so we’ve already used up 75% of the 2018 federal budget to pay for the Freedom Dividend and almost all federal revenue. That’s the raw cost, no strings attached.



While the Freedom Dividend would seek to replace welfare benefits, it would not affect Social Security.



Cost of Social Security 2018: $1 trillion

Pow! There goes the entire 2018 Federal Budget. But alas, we’ve only just begun. Andrew Yang has many other policies that will cost exorbitant amounts of money.



Now let’s do a very popular Democrat policy: Medicare for All. Most Democrats and proponents of Medicare for All claim that it would make healthcare more affordable across the board.



There’s no denying that America’s healthcare system is fundamentally broken from top to bottom. I give Yang credit for wanting to focus on holistic treatments, prevention, innovation and incentive structures for doctors. His healthcare plan is better than the other Democrat candidates.



Most people don’t realize that US public spending is already similar to other countries with socialized medicine. It’s the private costs that are out of control. The goal of Medicare for All is to eliminate those out of control private expenditures. But what’s the cost on the federal level?



There’s various estimates as to what the bill for Medicare for All would actually be. Bernie Sanders’ Single-Payer plan that was proposed in 2016 estimates the total cost over a 10 year span would be about $14 trillion. That’s about half of what most other project, but we’ll go with it.



Note: I’m ignoring the Bernie Sanders argument that it’d be cheaper for individuals over private insurance, we’re just focusing on Federal Spending. Is Medicare for All better than our current system? Probably. But that’s like saying one black eye is better than two.



Annual Cost of Medicare for All: $1.4 trillion

People will make arguments saying that it’d somehow be cheaper but I just don’t believe them. Government programs always cost more than intended. Hell, when medicare was introduced in 1965 it only covered citizens over the age of 65 as a part of the Social Security Amendments of 1965. Since then, it’s ballooned upwards of $700 billion annually.



Quick recap before we move on:



Total Annual Dividend: $3 trillion

Social Security: $1 trillion

Medicare for All: $1.4 trillion

Total cost (of three programs): $5.4 trillion

2018 Federal Revenue: $3.3 trillion

Projected Deficit: $2.1 trillion

We’re only three policies in and it’s already looking pretty impossible. But hey, let’s keep going!



Next stop: Democracy Dollars! In an effort to get money out of politics, Yang suggests we give each voting age citizen $100 a year to designate towards their favorite candidate. We’ll ignore all the bureaucracy needed to implement and oversee this policy, and just add up the hard cost of handing $100 to every citizen over 18.



Would this to put an end to lobbying? Man, that’d sure be nice but I don’t buy it. The Federal Government is corrupt as hell at every level and will stop for nothing to maintain the status quo.



Annual Cost of Democracy Dollars: $25 billion



Now we gotta take on that pesky climate change and the only way to do that is with robust federal spending! Yang proposes spending, er, I mean “investing” $4.87 trillion over 20 years on all kinds of fun sounding initiatives to reduce carbon emissions all the way to zero.



This includes vague things like:



$70 billion invested in combating rising sea levels over 20 years

$45 billion invested in National Labs over 15 years

$90 billion to establish and fund the Climate Change Adaptation Institute over 20 years

$200 billion discretionary spending to fund additional necessary programs over 20 years.

Annual Cost of “Going Green”: $243 billion



Here’s another fun little initiative: Prosperity Grants! $100 for everyone to donate to a non-profit. It’s just like Democracy Dollars but for non-profits. Party on, Garth! Like the Democracy Dollars, we’ll ignore the overhead of implementing this policy.



Annual Cost of Prosperity Grants: $25 billion



As you can see, Yang is clearly a master of #math and finance. And he wants you to be too. So he’s also introduced Free Financial Counseling for All! He wants to:



Direct the IRS to invest in online courses and AI-based advisors to help people understand their options for personal finance.

Allow all Americans to deduct the cost of a personal finance course at a community college from their taxes.

Create a division of the IRS to assist individuals who are looking for personal finance advice to contact them for that advice.”

How much will that cost? Who knows! I won’t even try to estimate it or include it on the tab. But I thought it was definitely worth mentioning. It’s also worth noting that this could just be added to the curriculum of K-12 public education, but hey, go big or go home.



Here’s another policy without any clear indication of what’d it cost: Promoting Vocational Education. The goal is to increase funding of vocational programs in public schools and create a public education campaign championing vocational jobs and education.



He came up with a great slogan for it, and I’m not making this up: “I work with my hands – and it’s awesome!” I’ll let you come up with all the hilarious sexual innuendos. Tweet them to me @iamsteviejames



Total cost: who knows!



Most democrats are now in favor of forgiving college debt, or at least some of it. Most also want to make college tuition-free moving forward. Yang wants to enact policies that are theoretically sound on the surface but not feasible in reality. It’ll cost the federal government money, but the amount is unclear. I’ll give him some credit for not going full on “free education” but he’s toeing the line. It’s only a matter of time (mark my words).



Here’s one that doesn’t cost the federal government anything but I find it to be counter productive in the long run. Yang wants to require employers to provide at least 6 months of paid maternity leave.



So as an employer, if you hire someone, and they have a child, you have to pay them 6 months worth of salary for completing zero work. Can some businesses afford this? Sure. However, most small businesses will not be able to operate with a gap in their work force. 89% of employers have less than 20 employees. It’s likely that this would hurt female job prospects more than anything.



Here’s some other policies that will cost the federal government without any clear indication of what the actual costs would be: Universal Pre K, “Affordable Community College”, Free Marriage Counselling and many other tit for tat proposals that I’ll admit, sure look good on paper! Whatever a politician says these will cost, you can at least double it.



Ok, let’s recap the major spending initiatives and see where we’re at for Yang’s first year as Supreme Dictator:



Total Annual Dividend: $3 trillion

Social Security 2018: $1 trillion

Medicare for All: $1.4 trillion

Democracy Dollars: $25 billion

“Going Green”: $243 billion

Prosperity Grants: $25 billion

Now let’s add military spending as well as interest on our debt:



The Federal government spends a lot of money on other things too:



Education, Training, Employment and Social Services: $93 billion

Transportation: $92 billion

Veterans Benefits and Services: $78 billion

Income Security (discretionary): $69 billion

Income Security (mandatory): $285 billion

Administration of Justice: $56 billion

International Affairs: $50 billion

“Other” – environment, science, space, administrative, etc – $139 billion

Federal Civilian and Military Retirement: $163 billion

And there’s more! But let’s stop here and see where we’re at. I think we covered most of the major spending.



Annual Federal Spending under Andrew Yang: $7.775 trillion



That’s more than double current levels of federal revenue and over a third of US GDP. And I want to remind you, I’ve been generous in my estimates. There’s federal expenditures that I’m not even including.



Hell, I’ve completely ignored Medicaid under the guise that Medicare for All would it eliminate it (It probably wouldn’t). I’ve also ignored the cost of all welfare programs assuming The Freedom Dividend would completely eliminate them (it wouldn’t). And I’m even ignoring that every single program in this article will increase in costs each and every year, exponentially.



Government always grows, federal programs are rarely, if ever cut. Military spending isn’t gonna be cut and interest on our debt is spiraling out of control. Even without Yang’s insane spending spree, we’re headed down a dangerous path.



Yang has all kinds of ideas on how we’d pay for these things. Like the VAT tax and carbon taxes. A carbon tax would increase the price at the pump. A $40 tax per ton would add about 36 cents to a gallon of gas. Yang proposes starting at $40 which would increase in regular intervals of $5/ton for the first 4 years and then $10/ton until it hits $100/ton.



Let’s be optimistic and try to see how we can fund a $7.775 trillion budget:



Federal Revenue was $3.4 trillion in 2018, so we’ll start there and add Yang’s proposals on top of it. This is an incredibly simple way to go about it, but let’s see where we land.



Total increased revenue: $2.428 trillion

New revenue total: $5.828 trillion

Deficit: $1.947 trillion

Maybe I’m missing something but we’re still pretty far off. I guess Yang could also raise tax rates across the board too. But as the laffer curve demonstrates, raising taxes doesn’t necessarily lead to higher revenues. Often times, the opposite effect is had.



A lot of Yang’s policies are dependent on the government becoming more efficient and less wasteful, but that’s wishful thinking at best. Government always grows. We’re also banking on insane levels of economic growth. If there’s a recession during Yang’s reign, this whole thing falls apart really fast.



But if he can shave $1.947 trillion off the budget and grow the economy like hell then we’re in good shape.



In my opinion, to put it bluntly: Andrew Yang would bankrupt the federal government and destroy the American economy. Sorry #yanggang #dothemath



It’s really important to note that congress will likely be controlled by Republicans if Yang is elected, so passing any of the radical policies aforementioned is highly unlikely. Most democrats aren’t even as radical as him. He’d have to use executive orders and completely trample the rule of law. (That’s why I dubbed him Supreme Dictator for this thought exercise.)



Regardless of all this nonsense: Almost all Democrats and Republicans continue to increase the size of the federal government, mostly to serve their own interests.



Even though Trump is slashing through regulations like no president ever has, the federal budget continues to grow.



Democrats propose radical change as the solution, but they just want to double down on the same policies that have gotten us into this mess. Republicans aren’t much better. Democrats are like Camel Wides, and Republicans are Camel Lights. Whichever you’re smoken’, you’re gonna die.



Perspective is key though; while the president has to sign off on spending bills, Congress writes them. It’s a little crazy that an entity boasting a 20% approval rating gets to decide how trillions of taxpayer dollars are spent (wasted).



The only way out of this mess is by dramatically reducing the size of the Federal Government. Which is highly unlikely. The Boogaloo may be inevitable.

This article was updated on October 10th, 2019 in an attempt to better articulate Yang’s proposed methods of funding his policies.

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