Analysis of Andrew Yang's Policies

Andrew Yang never really caught my attention because he was making pretty big promises and didn't seem great at supporting his position in debates. However he was recently a guest on the H3 podcast and when put in an environment where he has time to flesh out ideas properly he's actually very well spoken and quite effective at making arguments in support of his position. This is a little concerning because we can see how effective his talking points have been when used by left-leaning politicians in other nations.

He appeals to the middle and lower classes by offering everyone $1000 per month and claiming that poverty is increasing, etc. These claims are not true, at least when you consider population growth. Yes it's true the number of people living in poverty has been rising, but so is the population, and when you take the percentage of homeless people rather than the raw number you find the fraction of the population living in poverty has remained around the same level since the 1970's. Also his claims are not helped by the economy improving under Trump.

Poverty in the United States


It appears the same thing applies to gun death statistics, if you look at the raw numbers they are increasing but if you look at the number of gun deaths per 100,000 people it has been falling for decades (this anti-gun article from Vox has a good chart showing the drop), at the same time the number of guns in the U.S. has been rising. But I don't particularly want to get into that contentious topic, I want to mainly focus on the economic side of things and show why the promises being made by Yang are unrealistic and likely to cause more harm than good.

Yang proposes a nation wide 10% sales tax to partially pay for this, claiming that businesses could easily afford that tax on top of the corporate tax rate. There are several reasons that would have a negative impact on the economy and will cause prices to increase. In Australia we have a 10% sales tax which we call GST (goods and services tax), and obviously businesses do not pay this tax, they add the tax to the final cost of their product and make the consumer pay for it, so prices are essentially 10% higher than they would be without GST.

This is not really the same as price inflation, which is a devaluation of the dollar due to an expansion of the money supply. In a way Yang is correct by saying such an action would not cause inflation, but it certainly would cause prices to rise. If he instead simply decided to borrow the money then it would cause inflation, as I explained in this thread the single greatest cause of inflation is the creation of new money. When the government spends money it doesn't have it has to create new money as debt, diluting the money supply in the process.

The reality is a lot of businesses are already operating with competitive prices, and by enforcing new costs onto those businesses you give them incentive to move somewhere else or simply offset the extra cost onto consumers. If the money is coming out of consumers pockets to begin with then who is really benefiting? The fundamental flaw with this type of socialist thinking is this idea that money can just be pulled from thin air without any consequences, that simply isn't true, money always comes from somewhere and affects someone.

I don't entirely disagree with the idea of social welfare provided by the government, we have quite a nice system in Australia where the government will provide a basic income when you're not employed so long as you can prove you're actively looking for work, and in some cases people can get close to $1000 USD (worth of AUD) a month. That is a much more economically feasible solution but even our government has been cutting back on this welfare system because it's increasingly difficult to pay for even with a 10% sales tax.

You also have to ask if the U.S. is really worse off compared to other nations with a high sales tax. Our economy in Australia certainly isn't doing too great lately, it seems to be stagnating and our dollar is suffering, the very high cost of living in Australia is hurting a lot of people. The percentage of homeless people in Australia is around 2.5x worse than the U.S. and the U.S. economy seems stronger than it has been in a very long time, less people are unemployed, etc.

At the same time taxes and unnecessary regulations have been cut in the U.S. It's very easy to let these visions of Utopia draw you in but that's why they're so dangerous. I think Yang is correct by saying if we lifted everyone out of poverty it would greatly benefit the economy, but I also don't think there is an easy magical solution which lets everyone live comfortably regardless of how much they contribute to the economy. This idea that everyone will keep working just isn't realistic, many will keep working but many also wont.

The masses tend to resonate with this type of wishful socialist thinking because all anyone really wants is a better quality of life, but virtually no one really understands how that is achieved via economic principles, they simply want money to be taken from someone else and given to them, and very rarely does it actually result in people having a better quality of life. Often times it causes corporations to leave the country and the economy deteriorates due to rising prices and a lack of innovation.

The problem in the US is that so many things get added on.

Many States have sales taxes and they vary a great deal.

There are other taxes such as the ones on alcohol, tobacco, carbon and grass.

Now if you could sweep all those away and put a flat 10% on everything, it would work and simplify the overall system. State and Federal can sort out the share arrangements.

But sadly, simplifying the system is only of value to We The People. It would all crumble down upon them if We The People could understand the system.

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a reply to: ChaoticOrder

I like Andrew Yang. We have had Reagonomics now for 40 years and every year wealth inequality is increasing. The worker making the median wage is being driven deeper and deeper into a poverty wage:

Purchasing Power of the Consumer Dollar over 30 years (the numbers are not pretty or great if you are billionaire)

The problem is on the left socialism is the only answer people can come up with to address wealth inequality in this country. Republicans simple do not care if the worker making the median wage is driven into poverty because it will always come at some expense to the billionaires in charge controlling the lobbyists.

Here's a very good long interview with Andrew Yang where he discusses the reasons why he supports UBI as way to address our insanely high levels of wealth inequality:



If UBI is not the answer to addressing obscene wealth inequality then what is the answer? Strides in automation is about make all manufacturing jobs obsolete. How many middle manager jobs does the economy need? Republicans have no answers for the future. Automation and productivity gains is big problem.

a reply to: dfnj2015

Bernie Sanders interview with Joe Rogan is very interesting:

originally posted by: pheonix358
Many States have sales taxes and they vary a great deal.

I'd be interested to know what the average sales tax rate is, it seems some states don't have any sales tax. I'd also be interested in comparing prices between states with different rates, along with the poverty rates and number of large businesses in those states. Don't have time now but will probably do it at some point.

originally posted by: ChaoticOrder

originally posted by: pheonix358
Many States have sales taxes and they vary a great deal.

I'd be interested to know what the average sales tax rate is, it seems some states don't have any sales tax. I'd also be interested in comparing prices between states with different rates, along with the poverty rates and number of large businesses in those states. Don't have time now but will probably do it at some point.

Some states don't have sales tax like Delaware, and some states only have sales tax and no income tax like Florida and Texas. So adding a 10% tax into that type of mix would be economically catastrophic.

Even where I live, we can drive a few blocks in one direction and end up with a 3% variation in sales tax between the cities of Kansas City and Gladstone.

originally posted by: dfnj2015
a reply to: ChaoticOrder

If UBI is not the answer to addressing obscene wealth inequality then what is the answer?

First of all a money system not based on debt, it allows for continual growth of the money supply and if most of that new money gets sucked up by a small percentage of people then you'll inherently have a system which allows the wealth gap to grow forever.

Second, you learn to accept the fact there will always be some level of poverty and instead of aiming to eliminate it you aim to reduce it as much as possible. Imo that is most effectively achieved through a combination of free market capitalism and socialism, where the goal is to minimize the welfare and nanny state side of things because the healthier an economy is the less support people need.

Streamlining regulations and having fair taxes encourage business creation and growth. Instead of having a negative attitude towards corporations and doing everything possible to take a large chunk of their profits you do everything to help them succeed while also making sure they treat employees fairly.

A good example I've used before is the difference between Hong Kong and the rest of China. Although Hong Kong is technically part of China they have their own constitution which gives them free speech and the freedom of assembly, among other things. Hong Kong also prefers free market capitalism rather than socialism or communism, they encourage what is called "positive non-interventionism".

The reasons for the riots in Hong Kong recently is the central Chinese government trying to undermine the autonomy they are promised under the Sino-British Joint Declaration. I'm guessing part of the reason is China doesn't like them showing the effectiveness of capitalism compared to "communism", because there is a rather stark comparison to be made.

originally posted by: ChaoticOrder
a reply to: pexx421

China is ranked #86 on the list of countries by Human Development Index whereas Switzerland is #2, Hong Kong is #7, and the U.S. is #13. China is ranked #78 on the list of countries by GDP per capita whereas Switzerland is #9, Hong Kong is #10, and the U.S. is #11. Despite China having the 2nd largest GDP only behind the U.S., they also have a massive population which means a small GDP per capita and a low average wage compared to most nations. The only redeeming factor of their economy is the mass production results in low prices, but even accounting for that China ranks rather low in terms of average income per capita and is considered a middle income country.

As one of the world's leading international financial centres, Hong Kong's service-oriented economy is characterized by its low taxation, almost free port trade and well established international financial market.[13] Its currency, called the Hong Kong dollar, is legally issued by three major international commercial banks,[14] and pegged to the US dollar.[15][16] Interest rates are determined by the individual banks in Hong Kong to ensure they are market driven.[17] There is no officially recognised central banking system, although the Hong Kong Monetary Authority functions as a financial regulatory authority.[18][19]

According to the Index of Economic Freedom,[20] Hong Kong has had the highest degree of economic freedom in the world since the inception of the index in 1995. Its economy is governed under positive non-interventionism, and is highly dependent on international trade and finance. For this reason it is regarded as among the most favorable places to start a company. In fact, a recent study shows that Hong Kong has come from 998 registered start-ups in 2014 to over 2800 in 2018, with eCommerce (22%), Fintech (12%), Software (12%) and Advertising (11%) companies comprising the majority.[21] The Economic Freedom of the World Index listed Hong Kong as the number one country, with a score of 8.97, in 2015.[22]

Economy of Hong Kong

originally posted by: ketsuko

Some states don't have sales tax like Delaware, and some states only have sales tax and no income tax like Florida and Texas. So adding a 10% tax into that type of mix would be economically catastrophic.

It seems like replacing all that complexity with a single sales tax would be a good move, but you'd also need consistent income taxes across states too. The income tax is fairly high in Australia and our corporate tax is pretty high too compared to other nations, although our sales tax isn't too bad compared to some nations. But when you add those 3 taxes together it really does hurt people and businesses because they stack onto each other and consumers end up feeling the cost of all 3 in one way or another. If businesses have to pay a high corporate tax and sales tax they will raise prices and pay people less, or cut costs in some other way, or move to a better location.

The problem I have with every Democratic candidate is they all are wanting more restrictions on 2nd amendment rights. I will never vote for someone who starts out with limiting Constitutional rights so the rest of their policies are irrelevant.

a reply to: ChaoticOrder

So essentially you have no answer. Got it.

a reply to: Metallicus

I feel the same way about Republicans and certain issues which is why I NEVER vote Republican.

a reply to: ChaoticOrder

I once had an argument with someone about the flat tax not being fair. Their argument was it's not fair because my taxes would go up. And then I heard some ultra rich guy argue a flat tax isn't fair because why should he pay $200,000 per year when the person making the median worker's wage is only paying $8000 per year.

If we can't agree on a flat tax there's just no point to discussing it.

a reply to: ChaoticOrder

Yeah I think him and trump debating would be interesting, he is so calm and could defiantly be the water to trumps fire.

Shame he will never get the nomination, you can already see the msm propping up Harris and Biden, both of which have no chance of beating trump.
The dnc will make all the same bad backhanded choices they did in 2016 because they don’t learn from mistakes, they double down and just call you racist for pointing them out.

originally posted by: Quantumgamer1776
a reply to: ChaoticOrder

Yeah I think him and trump debating would be interesting, he is so calm and could defiantly be the water to trumps fire.

Shame he will never get the nomination, you can already see the msm propping up Harris and Biden, both of which have no chance of beating trump.
The dnc will make all the same bad backhanded choices they did in 2016 because they don’t learn from mistakes, they double down and just call you racist for pointing them out.

It's funny how the so called "left wing media" owned solely by Republicans are only propping up relatively right-wing candidates like Harris and biden. You would think if the mass media were truly "left wing" then Bernie and Andrew would get a lot more air time.

originally posted by: dfnj2015
a reply to: Metallicus

I feel the same way about Republicans and certain issues which is why I NEVER vote Republican.

Name a Constitutional right Republicans are trying to restrict.

I’ll wait.

a reply to: ChaoticOrder

Right out of the gate his math is broken. There are 210 million Americans 18 or older. A UBI of $12,000 per year to each of them equals $2,52 Trillion per year. Using the most generous formula and assuming that everything which comprises the US GDP would be subject to the tax (which it would not be, obviously), already it would take a 13% "sales" tax on all GDP components just to fund this huge payout. In reality, only portions of the GDP would end up subjected to the sales tax. We'd rapidly realize this idiotic idea would require a taxation much closer to 50% after stuff like critical health care, government services, interest payments, and rent were removed from the pool of money subjected to sales taxes.

Yang is a fool.

originally posted by: Metallicus

originally posted by: dfnj2015
a reply to: Metallicus

I feel the same way about Republicans and certain issues which is why I NEVER vote Republican.

Name a Constitutional right Republicans are trying to restrict.

I’ll wait.

Ask for an enumerated right... you left the door open for ridiculous modern day tea leaves reading exercises the more excitable in our society seem to adore participating in, by which, magically "fully paid universal health care" is considered a component of "life, liberty, and the persuit of happiness" because "I exist" and my emotions demand you pay for me while I sit on my fat ass complaining about rich people and those with drive.

originally posted by: dfnj2015
It's funny how the so called "left wing media" owned solely by Republicans

WHUT!?!?! Bezos, Zucker, Burke, Moonves, and Iger are Republicans in your world of make believe? Holy hell man, that's not even close enough to reality to write it off as a simple mistake.

a reply to: dfnj2015

Biden and Harris are right wing now?

Lol you idiots have gone so far left that your calling your own candidates right wing.


What did they say they like the constitution?
That they don’t agree with killing an already born baby?
Did they say you should have the right to speak your mind? I hear that’s right wing now too.

a reply to: Metallicus

so who is there for you to vote for?