In a recent floor speech, Senator Pat Toomey (R-Pa.) pushed back on the left’s misrepresentation of stock buybacks. Restricting buybacks, as proposed by Senate Minority Leader Chuck Schumer (D-NY) and Senator Bernie Sanders (I-Vt.), would harm savers and investors and undermine the free economy in favor of government control and, ultimately, socialism.

Functionally, buybacks occur when a company is reinvesting in itself by returning funds to shareholders and the economy. Contrary to the left’s narrative, stock buybacks do not come at the expense of productive investment, instead occurring after a company has no better or higher use for cash.

Restricting buybacks would have several consequences. First, as noted in Sen. Toomey’s remarks, it would harm the economy:

“It would do great harm to an economy that is, right now, doing quite well. And the main way that it would be so damaging is it would scare away capital. You just stop and think about it, our economy thrives when people are willing to invest in existing businesses, in new business, in startup businesses but that investment is an absolutely essential part of a thriving economy.”

Today, the economy is strong. GDP is projected to grow at 3.1 percent in 2018 while wage growth is at a nine-year high. Job openings have now hit a record high of 7.3 million and over 300,000 jobs were created last month. Restricting buybacks would undermine this success.

Restricting buybacks would also harm the 55 million workers that own a 401k and the 54 percent of Americans that own stocks, as noted by Sen. Toomey:

“This idea would be very harmful to the people that it’s presumably meant to help. You know about 40% of all equities in the U.S. are held in pension and retirement accounts. These are the accounts of teachers and cab drivers and truck drivers and folks who work at factories and do every other job that our economy depends on who put a little money away. It’s in a 401k plan or it’s in an IRA or it’s in an employer-sponsored pension plan.”

Finally, restricting buybacks are an attack on economic freedom, as Sen. Toomey noted in his remarks:

“I will say it seems exactly equivalent to me to confiscating the property of somebody, in this case their ownership in a business, and redistributing that confiscated asset to whoever they choose. That strikes me is pretty close to the definition of socialism, Mr. President. So it’s clearly an attack on the economic freedom that underpins our entire economy, an entire market economy.”

The economy is at record strength by many metrics. Proposals that take aim at share buybacks take direct aim at economic freedom in a way that will harm workers and stifle economic growth.