Why Are Republicans Addicted to Economic Theories That Never Work?

 

Damned Tide

                                               

Why Are Republicans So Addicted to Economic Theories That Never Work?

Like boat-floating, trickle-down economics and work for Medicaid coverage.

The first notion, that if you cut taxes for the rich, they will take that windfall benefit to expand or found new businesses, thus creating lots of job growth, has never ever generated those jobs, has never paid for itself, and has always created massive government short falls, no matter that this was tried at a state or federal level. Rising tide theory. “In 2012 Kansas enacted what Nick Johnson at the Center on Budget and Policy Priorities called the largest tax cut ever. The state repealed its top individual income tax bracket of 6.45 percent and lowered its other two brackets of 3.5 percent and 6.25 percent to 3 percent and 4.9 percent, respectively. More significantly, the state exempted from taxation all income earned by passthrough entities.

“Everybody knew the tax cuts would cost money; the fiscal note for 2014 estimated that the cuts would cost $800 million in 2014. But the tax cut package was sold as a panacea for all that ails the Kansas economy. Gov. Sam Brownback (R) predicted that the tax cuts would spur economic development, investment, and a lot of job creation. Indeed, Arthur Laffer, who developed the Kansas tax cut plan, practically guaranteed success. But it didn't work. The Kansas economy is stagnating, the deficit has grown, and the state's bond ratings have been embarrassingly downgraded.” Forbes, July 16, 2014. The legislature overrode a Brownback veto to restore taxes.

In 2017, Trump gloriously sponsored a federal corporate tax rate cut from 35% to 21%, promising all the new jobs that would generate more than enough income tax money to pay for the cut. Almost no solid jobs were created, the money was often used for mergers, acquisitions, dividends, executive bonuses or stock repurchases. What was created was a several trillion dollar increase to the federal deficit. That tax cut expires next year, and that “big beautiful” tax cut that Trump insists must be passed, not only restores that corporate cut but aims at even greater cuts across the board, a benefit that wildly benefits the mega-rich and not more than that. Since that tax reduction is projected to add $4-$4.5 trillion to the deficit, the rightwing debt ceiling hawks have mandated that the budget must be cut to trim that deficit. Enter Musk. What gets cut the most: benefits that go to most Americans, particularly those at the bottom of the economic ladder.

But trickle-down economics sounds so good, so right, that it has been a part of the GOP platform since Reagan… even though it has never worked. There is another GOP theory that seems welded onto their platform that likewise has never worked: require low- or no-income people who rely on Medicaid to work to get Medicaid coverage. Several states have played with that concept, one that the House GOP seems to think might be good at a federal level as well. Ken Alltucker, writing for the February 24th USA Today, explains this foray, which, when implemented (e.g., in Arkansas), has never generated remotely the cost benefits that were expected:

“The work requirement is one of several ways the GOP is seeking to slash hundreds of billions of dollars from Medicaid, the government health program for low-income and disabled residents that covers about 1 in 5 Americans. Medicaid also covers pregnant women, 2 in 5 child births, and nursing homes for some low-income seniors and others.

“Conservatives who support the idea say a work requirement would motivate people to seek employment and potentially secure health insurance through the workplace, saving taxpayers money. A Medicaid work requirement for healthy adults is about ‘empowering Americans’ and would save more than $100 billion over a decade, according to U.S. Rep Dan Crenshaw, a Texas Republican, who introduced the legislation this month…

“Medicaid work requirements are ‘designed to trip people up and then blame them for falling,’ [said David Machledt, a senior policy analyst at the National Health Law Program], ‘The lessons from everywhere where work requirements have been implemented show they don't accomplish their stated policy goals.’… Georgia is one of 10 states that didn't expand Medicaid under the Affordable Care Act. In 2019, the Trump administration approved Georgia Pathways to Coverage program to extend Medicaid coverage to low-income, non-disabled adults who work at least 80 hours per month or qualify for exemptions such as being full-time students or volunteers. The Biden administration stalled the program, but Georgia sued and the program began enrolling people in 2023.

“More than 6,900 residents are insured via Pathways, according to the Georgia Department of Community Health… In January, Georgia Gov. Brian Kemp, a Republican, lauded the program's initial results… ‘Despite the Biden administration's unlawful delay, Georgia Pathways has expanded healthcare coverage to thousands of low-income and able-bodied Georgians since it launched,’ Kemp said.

“The program cost the federal government and Georgia more than $54.7 million by September 2024 – mostly administrative expenses. Less than half that amount – $19.5 million − was spent on health benefits expenses on behalf or enrollees, according to figures provided by GDCH… The initial enrollment and program costs prompted Georgia's Democratic Sens. Jon Ossoff and Raphael Warnock and Sen. Ron Wyden, D-Ore. to request the U.S. General Accountability Office to investigate the program's administrative burdens and costs.

“In a December letter to the GAO, the senators said the program enrolled 1% of people who would have been eligible if the state expanded Medicare coverage under the Affordable Care Act. The senators said hundreds of thousands of Georgians were uninsured as ‘taxpayer dollars are being routed into the pockets of eligibility system vendors and consultants.’" Some those who do work still rely on Medicaid. Simply, yet another attempt to implement what sounds good but never works. Doesn’t repeating the same actions but expecting different results constitute one attribute of insanity? Is there such a thing as a poor billionaire? I can think of one billionaire I would like to deport! 

I’m Peter Dekom, and I must ask co-Presidents Musk and Trump if it is really worth destroying what makes America great to finance more yachts, private jet aircraft and luxurious second, third and fourth glorious retreats?