The Democratic Socialists of America just had their best election cycle in over a century. Three DSA-backed candidates swept New York City congressional primaries last month. Self-described socialists are winning school board races, state legislature seats, and city council positions across the country. For the first time since Eugene Debs was pulling nearly a million votes from a prison cell in 1920, socialism is a viable political movement in the United States.
This should concern you — not because caring about working people is wrong, but because the economic model being proposed has been tested repeatedly, at scale, around the world, and the results are in. They're not good.
But before we make this case, let's be honest about something: socialism doesn't grow in a vacuum. It grows in the fertile soil of legitimate grievance. When pharmaceutical companies charge $300 for insulin that costs $10 to manufacture, when CEOs make 350 times what their median employee earns, when hedge fund managers pay a lower effective tax rate than schoolteachers, when corporations buy back billions in stock while their workers can't afford childcare — people get angry. And they should. Those aren't free market outcomes. They're the outcomes of a system that's been rigged by the people with the most money and the best lobbyists.
So when someone shows up and says "the whole system is broken and we need to tear it down," that message resonates with people who've been getting squeezed for decades. The socialists aren't crazy. They're responding to real problems. Their diagnosis is often right. It's their prescription that's dangerous.
Let's walk through it.
The Welfare Trap: When Safety Nets Become Hammocks
The most immediate problem with the democratic socialist agenda is the dramatic expansion of the welfare state. Free college. Free healthcare. Free childcare. Free housing assistance. Guaranteed jobs programs. Universal basic income. The word "free" appears so often that you'd think money grows on trees — and that's exactly the problem. None of it is free. It's all paid for by someone.
But the cost isn't even the deepest issue. The deeper issue is what happens to workforce participation and economic dynamism when the government backstop becomes so generous that the marginal benefit of working diminishes.
This isn't a theoretical concern. We can observe it in real time.
The United States currently has approximately 10 million unfilled jobs. At the same time, labor force participation — the percentage of working-age adults who are either employed or actively looking for work — sits at about 62.5%, down from 67% before the 2008 financial crisis and never fully recovered. That means roughly 100 million working-age Americans are not in the labor force.
Now, many of those people have legitimate reasons — they're students, caregivers, disabled, or retired early. But a significant and growing number have simply opted out. The combination of expanded benefits, pandemic-era aid that took years to fully unwind, disability program expansion, and a cultural shift around work has created a situation where, for a meaningful slice of the population, not working is a viable long-term option.
Every expansion of the welfare state makes this worse at the margins. When you can receive $30,000–40,000 in combined benefits (housing assistance, SNAP, Medicaid, earned income credits, utility assistance, free school meals), the economic calculus of taking a $35,000-a-year job that requires you to commute, arrange childcare, and lose most of those benefits starts looking pretty unfavorable. Economists call this the "welfare cliff" — the point at which earning more actually makes you worse off because you lose benefits faster than you gain income.
Democratic socialists want to solve this by making the benefits universal rather than means-tested. That eliminates the cliff, but it also eliminates the incentive structure entirely. If everyone gets everything regardless of whether they work, you're relying purely on intrinsic motivation to keep the economy running. And while intrinsic motivation is real and powerful, building an economy around the assumption that everyone will work hard when they don't have to is a bet that has never paid off at national scale.
The Tax Spiral: Where Does the Money Come From?
Let's talk about paying for it, because this is where the math falls apart completely.
Senator Bernie Sanders' 2020 platform — Medicare for All, free public college, a federal jobs guarantee, expanded Social Security, the Green New Deal — carried an estimated price tag of roughly $60 trillion over ten years, or $6 trillion per year. The entire federal budget is currently about $6.7 trillion. In other words, the Sanders agenda would have roughly doubled federal spending.
Where does that money come from?
The standard answer is "tax the rich." And look, we're all for closing loopholes, eliminating the carried interest exception, and making sure billionaires pay at least the same effective rate as their secretaries. But the math simply doesn't work if you're trying to fund a $6 trillion annual spending increase solely by taxing the wealthy.
The total adjusted gross income of every American household earning over $500,000 per year is approximately $3.5 trillion. If you confiscated every dollar — not taxed it at a higher rate, but literally took all of it — you still wouldn't cover the cost. And that's before you account for the fact that people with that much money have options. They can move. They can restructure. They can relocate their assets to more favorable jurisdictions.
This isn't speculation. It's happened everywhere high tax rates have been tried.
France implemented a 75% top marginal tax rate in 2012 under President Hollande. Within two years, an estimated 12,000 millionaires left the country. Tax revenue from the super-wealthy actually declined. The policy was abandoned in 2015. More recently, Norway's wealth tax drove over 50 billionaires and centimillionaires to leave the country between 2022 and 2024, relocating to Switzerland, the UK, and other countries with more favorable tax regimes. Norway saw a net loss in the tax base it was trying to expand.
Capital is mobile. Wealthy people have the means and the motivation to restructure their finances or physically relocate when tax rates reach confiscatory levels. This doesn't mean you can't raise taxes on the wealthy — you absolutely can and should, within reason. But there's a curve, and if you push past the peak, you collect less revenue, not more. This isn't right-wing propaganda. It's the lived experience of every country that's tried it.
So if you can't fund the agenda by taxing the rich, what's left? Taxing everyone else. And that's exactly what happens in every country with a generous welfare state. Scandinavian countries — the models democratic socialists love to cite — fund their programs with broad-based taxes that hit the middle class hard. Denmark's top income tax rate kicks in at roughly $80,000 in equivalent purchasing power. Sweden's value-added tax (sales tax) is 25%. These aren't taxes on billionaires. These are taxes on teachers, nurses, electricians, and small business owners.
When American socialists say they want to be like Denmark, they leave out the part where Danish middle-class families pay effective tax rates above 45% and a 25% sales tax on nearly everything they buy. That's the trade. And American voters deserve to know what they're actually signing up for.
Capital Flight and the Competitiveness Death Spiral
Beyond the direct tax burden, there's a second-order effect that's even more damaging: capital flight and the erosion of economic competitiveness.
Businesses, like wealthy individuals, are mobile. Not infinitely mobile — you can't move a factory overnight — but over time, capital flows toward environments with lower costs, lighter regulation, and better returns. When you raise corporate taxes, mandate dramatically higher wages, impose extensive new regulations, and expand the scope of government involvement in business operations, you create an environment where the rational economic decision is to invest elsewhere.
This has played out across Europe for decades. The European Union's economic growth has systematically lagged the United States for the past 25 years. Between 2000 and 2024, U.S. GDP grew by approximately 80% in real terms. The EU grew by about 35%. U.S. GDP per capita is now roughly 50% higher than the EU average. The gap isn't closing — it's widening.
Why? Because Europe chose a model with higher taxes, more regulation, stronger labor protections, more generous welfare states, and less flexible labor markets. And the result is exactly what economic theory predicts: less entrepreneurship, less risk-taking, less innovation, and slower growth. Europe has produced almost no globally competitive tech companies in the past 25 years. Its startup ecosystem is a fraction of America's. Its venture capital market is a rounding error compared to Silicon Valley. The dynamism that creates jobs, raises wages, and improves living standards over time has been systematically dampened by the very policies democratic socialists want to import.
This doesn't mean European countries are terrible places to live. Many of them offer excellent quality of life for their current residents. But they're doing it by spending down accumulated wealth and running up debt, not by generating new prosperity. And their demographics — aging populations, below-replacement birth rates, high dependency ratios — mean the bills are coming due. The European welfare model was built when there were six workers for every retiree. Now the ratio is approaching two to one, and the math is getting ugly.
Rationing: The Inevitable Consequence
When you can't raise enough revenue through taxes and you've already borrowed as much as markets will tolerate, there's only one option left: rationing.
The UK's National Health Service is the most visible example. The NHS provides universal healthcare to every British citizen, and that's genuinely admirable. But the reality of how it works in practice is sobering. As of 2024, over 7.5 million people were on NHS waiting lists for treatment. The average wait time for elective surgery exceeded 14 weeks. Emergency department waits of 12 hours or more have become routine. Cancer treatment delays — where time literally saves lives — have been documented extensively.
The NHS isn't underfunded because the UK government is stingy. It consumes roughly 11% of GDP, comparable to many developed nations. It's underfunded because demand for healthcare is effectively infinite and no tax base, no matter how broad, can fully satisfy it. The result is rationing by queue — everyone has access on paper, but in practice, you wait months or years for care that Americans receive in days or weeks.
Canada's single-payer system has similar issues. The median wait time from GP referral to specialist treatment exceeded 27 weeks in 2023 — over half a year. Surveys consistently show that over 60% of Canadians have experienced difficulty accessing timely care.
This isn't because these countries are doing healthcare wrong. It's because when you make something free at the point of service and don't allow price signals to allocate resources, demand exceeds supply. Always. The only question is how you ration the shortfall: by price (the American model, which rations by wealth and is deeply unfair) or by queue (the single-payer model, which rations by time and is also deeply unfair, just differently).
Rationing doesn't stop at healthcare. Housing markets in heavily regulated cities produce shortages and sky-high prices. Energy markets with aggressive subsidy and mandate regimes produce grid instability. Educational systems with centralized control produce mediocrity. When the government allocates resources instead of the market, political priorities replace economic signals, and the result is always some combination of shortage, waste, and misallocation.
The Growth Problem: Why It Matters More Than Anything Else
Here's the argument that should end the debate but somehow never does: economic growth is the single most important factor in improving living standards for everyone, including and especially the poor.
The difference between 2% annual GDP growth and 3.5% annual GDP growth is the difference between a $20 trillion economy and a $35 trillion economy over 30 years. That difference funds schools, hospitals, infrastructure, R&D, defense, and yes, even social safety nets. You can't redistribute wealth that doesn't exist. And the socialist model, with its higher taxes, heavier regulation, and reduced entrepreneurial incentive, systematically produces slower growth.
Look at the countries democratic socialists hold up as models. Sweden's GDP growth averaged 2.1% from 2000–2023. Denmark averaged 1.5%. France averaged 1.3%. The United States averaged 2.1% — but that includes the 2008 financial crisis and the COVID recession. In the growth years, the U.S. consistently outperformed.
And here's the kicker: even the Scandinavian countries aren't really socialist. Denmark's prime minister famously corrected Bernie Sanders in 2015, saying "Denmark is far from a socialist planned economy. Denmark is a market economy." The Scandinavian model is a free-market economy with high taxes and generous social programs — but they got rich first under relatively free-market conditions, and then built the welfare state on top of the wealth that was generated. Sweden actually experimented with more aggressively socialist policies in the 1970s and 1980s — wealth taxes, extensive nationalization, aggressive redistribution — and the result was economic stagnation that led to a series of market-oriented reforms in the 1990s.
The lesson is clear: you can have a safety net, but you need the economic engine to fund it. And every time you weaken the engine in the name of expanding the net, you end up with less of both.
But Let's Be Honest About Why Socialism Is Growing
If the economic case against socialism is this strong — and it is — then why is it gaining ground in American politics? Why are voters, especially young voters, increasingly open to socialist ideas?
Because the alternative isn't working for them.
Housing costs have risen 40% faster than wages over the past two decades. Medical debt is the leading cause of personal bankruptcy. Student loan balances have tripled since 2006. The median home price is now over 5.5 times the median household income, compared to 3.5 times in 2000. Young Americans are getting married later, having children later, and buying homes later — not because they want to, but because they can't afford to.
Meanwhile, corporate profits are at record highs. Stock buybacks exceeded $1 trillion in 2024. Executive compensation packages routinely reach nine figures. The wealth of the top 0.1% has grown at roughly ten times the rate of the median household over the past 25 years. The game looks rigged because, in many ways, it is.
This is where we part company with the libertarian and far-right response, which is essentially: "free markets are perfect, any government intervention is socialism, and if you're struggling it's your own fault." That's not true, and pretending it is only drives more people into the arms of the socialists.
Free markets are extraordinary engines of prosperity. But they require guardrails. They require antitrust enforcement to prevent monopolistic behavior. They require consumer protection to prevent fraud and exploitation. They require environmental regulation to prevent companies from socializing costs and privatizing profits. They require a tax code that doesn't let billionaires pay lower rates than middle-class workers. And they require a basic social safety net that prevents people from falling through the floor.
When the right refuses to acknowledge any of this — when it treats every regulation as tyranny and every social program as communism — it creates the backlash that gives socialists their opening. The excesses of unchecked capitalism produce the socialists. The excesses of socialism, in turn, produce the reactionary right. The pendulum swings, and ordinary people get crushed in the middle.
The Common Sense Position
So where does that leave us?
We believe in free markets with guardrails. Markets are the best mechanism ever discovered for allocating resources, creating wealth, driving innovation, and raising living standards. But markets need rules, and the rules need to be enforced against everyone — including and especially the people with the most power and the most to gain from bending them.
We believe in a social safety net, not a social hammock. People who are struggling deserve help. That help should be designed to get them back on their feet, not to create permanent dependency. Programs should have clear goals, measurable outcomes, and sunset provisions. And the cliff effects that punish people for earning more need to be eliminated.
We believe in progressive taxation that's actually simple. Close the loopholes. Eliminate the special carve-outs. Make the code short enough that an ordinary person can understand it. And yes, make sure that people who earn more pay more — but at rates that are competitive internationally, not rates that drive capital and talent to other countries.
We believe in investing in people. Education, job training, healthcare access — these aren't handouts, they're investments in human capital that pay for themselves many times over through higher productivity, higher earnings, and higher tax revenue. A country that lets its people fall behind because it's too cheap to invest in them is a country that's eating its seed corn.
We believe in fiscal responsibility as a prerequisite for everything else. You can't fund a safety net, invest in infrastructure, maintain a strong defense, and prepare for the economic transitions ahead if you're drowning in debt. Every dollar spent on interest payments is a dollar that can't be spent on anything productive. The socialists want to spend without limit. The current right is spending without limit while pretending to be conservative. Both are irresponsible. Both are mortgaging the future.
And we believe in rejecting the false binary. America's choice is not between unfettered capitalism and democratic socialism. There is an enormous, well-lit, well-populated middle ground where free markets generate prosperity and smart government ensures that prosperity is broadly shared. That's not centrism for the sake of being centrist. It's the approach that has actually worked, everywhere it's been tried, throughout history.
The socialists are wrong about the solution. But they're often right about the problem. The answer isn't to ignore the problems they're responding to. The answer is to solve those problems with approaches that actually work — that preserve the dynamism of the American economy while ensuring that its benefits reach everyone, not just the people at the top.
That's not a radical position. It's the most common-sense position there is. And it's exactly where the 80% of Americans who are tired of both extremes already stand.
The question is whether they'll have a party that represents them. We intend to be that party.