Yesterday morning I awoke to news that the latest Affordable Care Act repeal attempt had been tweaked to give more money to Alaska and Maine in an attempt to get the votes of Senators Murkowski and Collins. Secondly, I saw that the GOP tax plan will provide massive tax cuts to the very rich – on average, the top 1% will save $175,000 each year – and that our Republican elected officials are embracing some funny math to justify it.
While the Senate leadership has scrapped the ACA repeal vote in light of opposition from three republican senators, the end result of both these plans is death.
Throughout history all great empires have fallen and it is usually caused by internal strife rather than external attack. You will find very few people today who would not classify the United States as a divided country. We’re divided over economics, healthcare, race, our opinions on the purpose of a social safety net, among other issues. This weekend we were divided over anthems and football. Two-thirds of the country – including a fifth of the president’s supporters – believe that Mr. Trump has been acting as Divider in Chief.
The actions of the Republican Party seem geared to help their wealthy supporters rather than make decisions which strengthen the country. I’m sure many of them realize that companies are not likely to move operations to the U.S. based solely on a tax rate cut, especially when the country’s leaders project an image of instability.
Whatever tax reform results from the Republican-only approach will likely be temporary because there is good economic data which show tax cuts on the wealthy do not stimulate the economy. Just like Kansas’ failed tax cut experiment, a federal tax cut for the rich will not stimulate growth but will hasten the decline of the United States. Imagine the sales pitch:
“Move your business to the United States where you will enjoy low taxes and an undereducated and less reliable workforce in which many will need extra time off because they lack health, child and elder care options. Additionally, our political system is so divided that should the other side regain power in 2-4 years, you can expect your taxes to increase substantially. And we have great beaches.”
The GOP will push through the tax cuts to reward their wealthy supporters and justify it by assuming 3-4% economic growth. The Federal Reserve is on record with their plan to target growth at 2% to reduce the chance of inflation so the GOP’s growth projections are unrealistic.
The likely result: huge federal deficits with ever increasing debt and interest payments that will further reward the rich and squeeze the middle class. In other words, death to the American system that served us so well from the end of World War II through the turn of the century.
About the only fiscally responsible action that the GOP is proposing is the repeal of the Affordable Care Act. It’s not fiscally responsible because it will reduce spending on health care through efficiencies or better targeted healthcare. It’s because it will kill people and some of those people are currently collecting social security and racking up large medical bills paid by Medicare and Medicaid. Once they’re dead, the federal government saves a lot of money.
The problem with the GOP calculations is that their repeal will not affect the retired population as much as it will affect the younger working class which has traditionally been the support structure for the economy. By reducing the ranks of the insured by about 20 million, the GOP will cause people and institutions to die. The people are the many low and lower middle income individuals who currently have health insurance but would lose it. The institutions include rural hospitals and labor intensive businesses such as small farms which will have an unreliable workforce because of family health issues.
The Republican Party does not seem overly concerned about those deaths. The loss of small farms will further reward their large farm supporters who will be able to expand operations at a discount. Rural hospitals are expensive and reducing their number will help reduce the number of people on Medicare and Medicaid because the sick elderly won’t be able to get medical intervention in time. While some GOP candidates may lament the loss of elderly voters, the 2016 election showed that gerrymandering and divisive politics has made most of their congressional districts safe Republican seats so it’s an acceptable loss for the party of death.