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Single Payer Healthcare is Better, Would Lower Costs and Make America and American Workers Globally More Competitive

(as published in Letters to the Editor in the Times-Dispatch, December 4, 2017)

 I read with great interest the “common-sense plan for better health-care delivery” by doctors McGuire, Scott, Thomas and Davis and Hullinen W. Moore.  Basic single-payer universal healthcare and supplemental, nice-to-have coverage from private insurers mirrors my campaign position as a candidate for Virginia’s first congressional district.  This plan would sharply lower our total healthcare costs, improve our general health and healthcare outcomes.

The authors correctly describe the American healthcare system as enormous, complex, redundant, inefficient and twice as expensive as that of other industrialized democracies.  They did not detail the incredible damage our healthcare system does to our global economic competitiveness and ability to create well-paying American jobs.  We won’t fix our economic competitiveness until we fix our healthcare system.

Only in the US is the employer primarily responsible for an employee’s healthcare. Elsewhere the government fulfills this role.  An American worker has to be far more productive than a German, Japanese, or other nationality to cover his family’s healthcare cost.   Today, if a company has two factories, one in America and one overseas, and wants to close one, most likely it will choose to close the American factory.  This is because here the employer must pay for healthcare, which costs twice as much as it should. Likewise new factories are built overseas, not here.

Over time we can reduce our healthcare costs by 50%, to levels common in other industrial countries.  If France and Canada can do it, so can we.  Our expensive healthcare system hurts American economic competitiveness. The difficulty and expense in getting insurance financially ruins families and small businesses, creates incredible anxiety, and fosters unhealthy situations.

Guaranteed basic healthcare with single payer will create secure, well-paying jobs and enable Americans to start their own businesses. Such a healthcare system would make our economy and our workers competitive again.

 

The GOP Balanced Budget Amendment:  Hypocrisy & Poor Economics

Just recently the Republicans in the House voted for a balanced budget amendment to our Constitution that – were it to pass - would limit the country to spending only as much revenue as it takes in each year.  While it might sound good to those who prefer bumper stickers and slogans to process and policy, all republicans know this proposed constitutional amendment has virtually zero chance of passage.  But actually amending the Constitution is not their objective.  Their goal is to throw enough smoke into the air that people ignore their total lack of responsibility in managing our federal budget.

Before we talk about the GOP’s mismanagement of the Federal budget though, let’s first discuss basic economic theory—something you and I already know because we live in the real world outside the GOP bubble. The government would be dumb to limit its total spending to current revenues.  It’s absolutely amazing to me that republicans, members of the supposedly fiscally responsible “business” party, do not understand the difference between expense and investment—something any college freshman learns in Econ 101.

Most of us borrow to invest in our homes and in ourselves. How many Americans do you think paid cash for their homes with one year’s income?  Or for their cars?  Or for their technical schooling or college education?  Not only is it OK to borrow to invest in long-term assets, it’s smart to do so.  We should not borrow to pay for entitlements or non-revenue producing assets like the military.  These in fact should be paid for out of current revenues.  It makes perfect sense however to borrow to invest in our infrastructure and in our citizens.

What has been the payback on the Golden Gate Bridge, universal secondary education, our electrical grid, our Interstate Highway System, or the GI Bill?  Immeasurable. These intelligent investments made during the 1930's through 1960's are what once created the world’s largest middle class and most vibrant economy. We should have done the same thing after the Great Recession of 2008:  borrowed money at the lowest interest rates in history and fixed our crumbling infrastructure.  This would have put Americans back to work and it’s what President Obama and the democrats wanted to do but the republicans blocked it.  Terrified of deficits—unless they’re the ones creating them—and incapable of discerning the difference between spending and investing, the GOP blew one of the biggest opportunities for our country in our lifetimes.

The Federal government can borrow money at very low interest rates and invest in our infrastructure and people, greatly increasing our economic potential. In fact by not investing and by giving budget-busting tax breaks to the wealthy and businesses instead, we run a real risk of economic growth outpacing GDP capacity, resulting first in a bubble economy like in 2007 and 2008, and then another huge GOP-caused Great Recession.  This is actually what I expect will happen if the democrats don’t win in November and stop this runaway Trump train, the Deficit-Express.

Remember, these are the same economically clueless republicans who passed a massive tax bill last fall that is heavily tilted in favor of the wealthy, the Bi-partisan Budget Act of 2018, and the Consolidated Appropriations Act.  The non-partisan Congressional Budget Office estimates these three pieces of legislation, each signed into law by President Trump, will result in a $2.7 trillion increase in the federal deficit through 2027, and much greater risk of higher interest rates and inflation.

CBO Scores Trump's Great Deficit Plan

If the Republicans actually cared about the budget deficit they wouldn't have lowered the top tax rate on the very wealthy from 39.6 per cent to 37 percent; this increased the deficit by $139 billion. Many of the wealthy will actually see their tax rate on pass through income drop to 21%.  If the GOPers really cared as much about deficits as they do about contributions from their wealthy donors, they would not have drastically cut the alternative minimum tax for high earners, increasing the deficit another $429 billion.  They also could have ended the carried-interest loophole that benefits wealthy hedge fund managers; this increased the deficit another $12 billion but who would do that to their favorite campaign-funders?  And they would not have eliminated the estate tax on the super rich, increasing the deficit yet another $83 billion and creating a permanent über-class.

To make matters worse, these Republicans – in charge of both chambers of Congress and the White House, could not even pass a budget until February—four months late.   This spending bill should have been passed last September. If they hadn't passed the bill Trump signed while complaining “I will never sign another bill like this again. I’ll never do it again. Nobody read it. It’s only hours old,” we’d have had yet another government shut down.

Instead of just passing omnibus spending bills at the last possible moment with across-the-board increases in all programs, Congress should actually consider what programs are working and which are not and what our current needs are, and then pass a budget consistent with expected revenues and objectives.  I can assure you a budget properly passed would have a totally different set of priorities—priorities that benefit citizens and not special interests and not cost what we’re spending now. 

But in the height of hypocrisy—maybe we should start calling it “GOPocrisy”-- House republicans pushed this sham piece of legislation calling for a constitutional amendment requiring a balanced budget. An amendment to the constitution would have to be approved by a 2/3 vote in the house and 2/3 in the Senate and then be approved by 38 of the 50 states.  This sham legislation couldn't even get the 2/3 vote it needed to pass the House.

The Republicans control the House, the Senate and the White House.  If they really wanted a balanced budget, they have the power to do it.  Instead they prefer grandstanding to governing.

I am a progressive congressional candidate for Virginia’s First District. I’m running against Rob Wittman.  He has rubberstamped all three of these terrible bills.  My policies would not only provide universal single-payer healthcare, investment in education and infrastructure, and action on climate change but actually lower federal spending.  You won’t find a true fiscal-conservative in the GOP, but you’ll find one right here.  It’s time for a change.

Higher wages improve the economy

(As published in the Times-Dispatch March 23, 2017)

Editor, Times-Dispatch: I read with disappointment your “Outwageous” editorial lamenting that gubernatorial candidates Ralph Northam and Tom Perriello want to raise the minimum wage to $15 an hour. Instead of a higher minimum wage, you propose that the government bridge the gap between the non-living wage paid by an employer and the minimum income required to live. In effect you want the government to subsidize employers who can’t find the means to pay their workers a fair day’s pay for a fair day’s work.

Economic theory actually tells us that there is a tradeoff between labor and capital — when the cost of one increases, the use of the other does as well. A higher minimum wage would drive investment and make each of us better off, regardless of how much we earn now. While there is no evidence that a higher minimum wage results in job losses after a short period of adjustment, there is a lot of evidence that a gradual increase in the minimum wage drives investment in labor-saving capital and investment in human capital, i.e., training. So even if someone does lose his or her job as a result of a higher minimum wage in the short run, in his next job he will earn a better living and be more productive.

Travel to a high-cost country and you will still find the fast food restaurants we have here, only the workers will be better trained, more productive and use more automation. Likely they will have better benefits, including health care, and more tenure. Until those who believe a higher minimum wage suppresses job growth put away their ideological myths and observe the way the world really works, they will be holding back upward mobility, productivity and economic growth.

GOP Tax Reform is a Fraud and a Con

The Wikipedia entry reads:  Three-card Monte is a confidence game in which the victim, or "mark", is tricked into betting a sum of money, on the assumption that they can find the "money card" among three face-down playing cards. Three-card Monte is an example of a classic "short con" in which a shill pretends to conspire with the mark to cheat the dealer, while in fact conspiring with the dealer to cheat the mark. The mark has no chance whatsoever of winning, at any point in the game. In fact, anyone who is observed winning anything in the game can be presumed to be a shill.

The tax reform program currently being promoted by the GOP is also a con game.  And as in all con games, if you don’t know who the mark is, it’s you.  The shills are our straight-faced GOP congressmen who distract ordinary Americans with the promise of a small and temporary tax cut while they give our wealthiest citizens and largest businesses huge and permanent ones.  The “money card” that the mark will never find is the promised higher wages and better jobs trickling down as companies and the wealthy invest their huge tax cuts to grow the economy.  Trickle down economics have never have worked in the past and they won’t work now.

The cover story, the con that justifies the tax cuts, is that the wealthy and businesses are over-taxed and cash-starved.  The shills in congress deliberately mislead us by quoting the higher nominal tax rates, not the effective tax rates that corporations and the wealthy actually pay.  The effective or real federal rate for US corporations for example is about 18%, not 35% as the republicans like to claim.  And taxes on US businesses add up to only 2.2% of our GDP, well below the average among all industrial countries of 2.8%. Our companies are not at a tax disadvantage.  Nor are our businesses starved for cash.  Just the companies in the S&P 500 alone for example have $1.5 trillion in cash available for investments. 

A tax cut won’t add to more job creating investments, it’ll just add to dividends and share buy back programs benefiting the wealthy, who’ll now pay even lower taxes on their gains.

The wealthy are not over-taxed either. Their effective tax rate is also well below the nominal rate of 39.6% quoted for ordinary income and capital gains and dividends are only taxed at 20% or less. An American who makes $225 thousand a year—which puts him or her at the 90th percentile of income-- pays on average an effective federal rate of 21.7% not 39.6%.  The wealthiest earners do pay about 33% in taxes on income they can’t shield from taxes, but they have many legal ways to avoid taxes.  President Trump, if you think I’m wrong, prove it by releasing your tax returns. Tell us what the proposed changes in the estate tax would mean in tax savings for your family.

So if we really want to reform our tax code and not give the wealthy even more, we should start out by demanding that our Republican representatives tell us the truth and not shill out falsehoods to booster their con. And how about some open hearings before you vote for it.  Oops, too late.

The GOP claims that tax reform will create higher paying jobs and grow the economy.  That growth, albeit taxed at a lower rate they say, will more than pay for tax cuts made to businesses and the wealth even as tiny tax cuts for the working and middle classes disappear.  This is a lie.  It has never happened before and it won’t happen now.  Here are some facts:  tax cuts for the wealthy increase the deficit but they do not increase wages for ordinary Americans.

President Reagan was the first to try to increase revenues by lowering tax rates. It didn’t work.  Reagan inherited a budget deficit of $79 billion.  Deficits soared after he cut taxes. Deficits averaged $177 billion annually during his two terms.  And no, economic growth did not make up for the lower rates.  But the rich did get richer.  The top 1% owned 21% of the country in 1980.  By the time President Reagan left office, they owned 36% and salaries and wages for ordinary Americans did not grow at all.  They were flat.

President Clinton inherited a deficit of $255 billion, and actually raised taxes while growing the economy substantially.  President Clinton left President George W. Bush an annual surplus of $128 billion.  President Bush promptly lowered taxes and deficits soared. President Bush’s annual deficits averaged $443 billion compared to Clinton’s average $8 billion surplus.  Tax-cutting President Bush left Obama a shattered economy and an annual deficit of $1.4 trillion. 

President Obama went to work, investing in the economy, allowing tax cuts on the wealthiest in America to expire, lowering the deficit most years in office and leaving President Trump a deficit of $440 billion, a third of what he inherited.  If the republican’s tax cuts do go through, deficits will soar by over $200 billion a year to $765 billion a year in 2019 alone.  Republican tax cuts will increase our national debt by $1.7 trillion if they actually create growth. Otherwise their deficits will total $2.5 trillion. Hard to explain why congressmen like David Bratt who campaigned against deficits would vote for something like this.

So why are the republicans doing this?  First of all, because their wealthy donors demand it.  Republican office holders have been told, point blank, lower our taxes or we won’t contribute to your next campaign.  Secondly and cynically, because as their tax cuts take hold and our deficits soar, as interest rates go up, as our government is starved for cash, the republicans will use the crisis they created to cut back on government spending.  While tax cuts for the wealthy are preserved, tax cuts for those in the middle will disappear.  And the republicans will use the debt crisis as an anvil upon which to pound out cuts to education, infrastructure spending, federal emergency management, Medicare, Social Security, Medicaid, and other programs that actually help people.

Let’s review some numbers from the Tax Policy Center and Joint Committee on Taxation.  In 2019 the republican tax cuts Rob Wittman and David Bratt voted for will reduce taxes for 89% of middle class Americans by $1,090.  They will reduce taxes for someone making over $733 thousand by $64,210 per year—make ten times as much and get a 60 times bigger tax cut.  They will reduce taxes on a point-one-percenter by $350,020 per year. 

And what else will ordinary Americans get as deficits soar?  Well for one, no real tax cut. Increases in your healthcare costs as they sabotage ObamaCare will easily eat up your automatically disappearing $1,100 tax cut. Two, as interest rates go up, so will the cost of buying a home or car.  And our deduction for mortgage interest and state and local taxes will go down which some analysts say will lower property values.  And there will be no money for education, infrastructure, Medicare, and Social Security.  And no money for the America where we’re all in this together but big tax cuts for those who believe it’s every man for himself.

Our congressmen, Rob Wittman and David Bratt, without holding public hearings or town hall meetings, voted for this fiasco.  They think you will fall for the big con.  Don’t be the mark. Remember who they work for next time you vote.

 

 
 


Committee to Elect John Suddarth
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