Popular surveys show young Americans increasingly attracted to socialism. But how much do those survey respondents really know about the consequences of socialist policies?
They should listen to Felipe Moura Brasil. A Brazilian journalist, he warns of how socialism affected his country:
In the early 2000s, Brazil’s economy was growing rapidly. The government had enacted economic and monetary reforms and divested holdings in some state-run companies, giving the private sector more room to breathe. Inflation—a chronic problem in Brazil—was dramatically reduced. Foreign investors poured into the country, eager to catch a portion of our expanding economy. The future seemed promising.
But today, our economy is in shambles, unemployment and debt are massive, and powerful politicians are being investigated for involvement in the largest scandals of fraud and corruption in the country’s history.
In 2002, a socialist politician named Lula da Silva ran for the presidency. He was a socialist, but painted himself as a modern, cool kind of socialist. He would be the politician who would heal national divisions and unite everyone. He even had a nickname: “Lulinha paz e amor,” which means “Little Lula peace and love” in Portuguese.
But the old message about the need for income redistribution to decrease inequality was still there. The media, academic elite and celebrities assured Brazilians that by transferring the money from the rich to the poor, the poor could finally be richer. But the only ones who really got rich were Lula and his corporate and political friends. It only got worse under his successor, Dilma Rousseff.
The socialists increased government spending, deficits, and debt. They called it a “stimulus.” They increased the minimum wage and the benefits of social programs. They called it “social justice.” They increased the salaries and retirement benefits of the civil service. They called it “investing in the future.” They handed out thousands of jobs in the government and state-owned companies as favors to their political allies. And they called it “good governance.”
It worked for a while. Socialism always works at the beginning. But government spending just kept going up, and then Lula’s socialist paradise fell apart and the economy fell with it. The outcome: from 2008 to 2015, government spending grew nearly four times as fast as tax revenue.
The economy shrank 3.8 percent in 2015, the worst result in 25 years. That same year, a World Bank survey found Brazil’s economy to be one of the world’s worst. Out of 189 countries, we were the 16th hardest place to open a business, the 60th most difficult nation in which to register property, and the 12th most complex place to pay taxes.