“The cost of Obamacare is out of control, plus, it’s not good Healthcare. I’m seriously looking at alternatives… We had a couple of Republican Senators who campaigned for 6 years against it, and then raised their hands not to terminate it …It was a low point for the Republican Party, but we should never give up!”
Donald Trump on a Truth Social post, November 25th.
If reducing the federal corporate tax rate from 35% to 21% in 2017, creating trillions of dollars of deficit, didn’t make it clear, if the constant use of the word entitlement to describe seniors’ receiving their lifetime payroll contributions back in the form of Social Security payments and if the fact that the United States has the worst income/wealth inequality in the developed world didn’t make it absolutely clear to you, let me put it this way: We cut taxes for the rich, made no real contribution to better jobs, but we saddled everybody with carrying the deficit and paying rising interest on it. Sort of Robin Hood in reverse. Oh, and remember, we are the only nation in the developed world without universal healthcare where profits and mark-ups among healthcare insurers, medical professionals, hospitals and pharmaceutical companies are far and away the highest on the planet. We have the most expensive healthcare on earth.
We have a political party, from Reagan’s GOP to the present MAGA Party, that has not veered from the completely failed “supply side/trickle down” economic assumption that cutting taxes is a “rising tide that floats all boats.” As the worker-to-retiree ratio has become more heavily weighted with older Americans, the opposite of what was our reality we Social Security and Medicare were created in the 1930s, it became clear that the system of financing these benefits needed to be restructured. The GOP approach has been to cut or eliminate these programs, using misshapen words like entitlements and creeping socialism in way that completely defy their dictionary definitions (in all acceptable dictionaries!). Tax wealth? Tax the rich? How did this income/wealth inequality get so lop-sided if we were over taxing the monied class?
As life becomes increasingly unaffordable for most of us, as we subsidize wealthy Americas with tax cuts and massive tax code loopholes, please see my November 21st In America, Why the Rich Get So Much Richer blog for the dirty details. We have a deficit because we choose to have a deficit. Despite being the richest nation on earth, the GOP mantra, repeated so often that many Americans actually believe it, is that we are spending so much on entitlements that we are harming the job creators with undue taxes. Breaking our entire nation. Yet, our taxes are among the lowest in the developed world. Since no one really likes paying taxes, the notion of cutting them is alluring. Except tax cuts have very little impact on middle- and low-income Americans but offer huge benefits to the rich.
More than 10% of Americans wouldn’t have healthcare but for the Affordable Care Act (ACA sometimes called “Obamacare”). Trump promised a “better” system, but in his four years as president never even delivered a proposed alternative. As NBC News (November 27th) tells us, while initial support for the ACA (passed in 2010) was skeptical, it has significantly turned very positive over the years: “As president in 2017, Trump and a Republican-led Congress fought to repeal the law but fell short. The following year, that effort fueled the backlash against the GOP in the midterm elections. Health care ranked as the top issue for voters, and they favored Democratic candidates by a margin of 75%-23%, NBC News exit polls showed.
“But Trump persisted, endorsing a lawsuit at the Supreme Court in 2020 that would have dismantled the law. In the 2020 election, health care was once again an important issue for voters, and those who cited it as their top concern favored Biden over Trump by a margin of 62%-37%, according to NBC News exit polls… Trump would need to get elected in 2024 with a Republican-controlled Congress to have any chance of undoing the ACA.” Indeed, playing fast and loose with the numbers, focusing solely on reducing expenses without any notion of creating a fair system of taxation, even the most “moderate” of GOP candidates wants further to cut taxes for the rich and pare Medicare and Social Security benefits.
Nobel laureate in economics, Paul Krugman, writing an OpEd for the November 27th New York Times, addresses Nikki Haley’s campaign stance on the issue: “Haley has shown some consistency on issues of economic and fiscal policy. And what you should know is that her positions on these issues are pretty far to the right. In particular, she seems exceptionally explicit, even among would-be Republican nominees, in calling for an increase in the age at which Americans become eligible for Social Security — a bad idea that seems to be experiencing a revival.
“So let’s talk about Social Security… The first thing you should know about Social Security is that the actual numbers don’t justify the apocalyptic rhetoric one often hears, not just from the right but from self-proclaimed centrists who want to sound serious. No, the exhaustion of the system’s trust fund, currently projected to occur in roughly a decade, wouldn’t mean that benefits disappear.
“It would mean that the system would need additional revenue to continue paying scheduled benefits in full. But the extra revenue required would be smaller than you probably think. The most recent long-term projections from the Congressional Budget Office show Social Security outlays rising to 6.2 percent of gross domestic product in 2053 from 5.1 percent this year, not exactly an earth-shattering increase… But much of this projected rise reflects the assumption that medical costs will rise much faster than economic growth, which has been true in the past but need not be true in the future. Indeed, since 2010, Medicare spending has been far less than expected. And there is every reason to believe that smart policies could further curb health care costs, given how much more America spends than other wealthy nations.” Those mark-ups and profits do not have to continue to rise if Congress cared. Not to mention that American life expectancy is actually falling, particularly among the lower rungs of our economic ladder!!!
Los Angeles Times columnist, Michael Hiltzik, spends tons of time in his November 24th piece tearing down the underlying mythologies that cast Social Security as unsustainable, like: “Most people 65 and older receive the majority of their income from Social Security… There isn’t space here or time for me to list every solecism in the piece, so I will focus on some of the most egregious errors… ‘People who are young and working ... are funding the retirement of generally wealthier Americans.’ This notion was popularized by former Sen. Alan Simpson (R-Wyo.), who went around calling Social Security beneficiaries ‘greedy geezers’ and disdained the program as ‘a milk cow with 310 million tits.’ … The average Social Security monthly check is $1,709.70, which works out to $20,516 a year.
“That’s about $800 more than the federal poverty line for a family of two… The idea that cutting off the wealthiest seniors or at least reducing their benefits would help save Social Security is a popular myth, with recipients like Warren Buffett and Bill Gates the most common illustrative targets. The goal is to promote ‘means-testing’ the program… [Retired millionaires] receive about 15 hundredths of a percent of the $941 billion in benefits the system paid out [in 2017, the year of the massive tax cut].” Talk to me when we don’t lead the world in income/wealth inequality.
I’m Peter Dekom, and in the complex world of tax policies, it is easy to bamboozle so many Americans by substituting snappy catchphrases for cold hard facts.
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