Thank God for the Republican House of Representatives


It is now almost certain that Hillary Clinton will be the Democratic nominee for President and that Donald Trump will be the Republican nominee. The two biggest problems facing our country today are:

  • Slow economic growth, averaging just 2.1% since the end of the recession in June 2009, seven years ago. Even though unemployment is down to 5%, stagnant wages for the middle class have not nearly recovered from their pre-recession high.
  • Massive debt. The public debt (on which we pay interest) is now at 74% of GDP and rising. When interest rates go up, as they surely will eventually, debt payment will rise by hundreds of billions of dollars per year and be a huge drain on government revenues.

The likely Presidential nominees are not adequately addressing these problems:

  • Hillary Clinton wants to increase government spending by about $100 billion per year to be spent on various new programs and raise the top tax rate to 45% to pay for them. This will do nothing to either grow the economy faster or shrink our already sizable deficit.
  • Donald Trump has promised to keep entitlements as they are and spend more on infrastructure and defense. He also sees debt as useful. “I probably understand debt better than anybody” he has stated. His tax plan (which he says is negotiable) will create massive new debt.

If Clinton is elected, she may pull the Senate Democratic along with her. But either way the House of Representatives will likely remain Republican with Speaker Paul Ryan.
Capture3Since the Republicans took over the House in 2010, they have consistently proposed budgets each year to shrink the deficit and produced a balanced budget within ten years.  The new President, either Clinton or Trump, will have to negotiate their own ideas on spending and taxes with a fiscally conservative House.
The country is indeed very fortunate for this circumstance.

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2 thoughts on “Thank God for the Republican House of Representatives

  1. For 2015, I propose that there is a sensible line of logic that would reveal a fundamental reality of the federal deficit last. Assuming that the excess cost, i.e., its inefficiency, of our nation’s healthcare in 2015 was $800 Billion and federal government (Medicare and Medicaid) paid 40% of that excess cost, then the $300 Billion excess cost to the Federal Treasury represented 60% of the $500 Billion national deficit estimated for 2015. There is absolutely no way to spend our selves out of that scenario.
    AND, there is absolutely nothing that is occurring by healthcare reform that will even slightly reduce the excess cost of our nation’s healthcare. Sure, there are excess profits, there is a degree of fraud, there is poor healthcare (especially our nation’s continually worsening maternal mortality ratio), there is administrative inefficiency, and there is a failed investment in a national electronic medical record. Together, these might represent 20% of the total excess cost, maybe.

    Remember again, our nation’s agriculture industry is the most efficient and productive among all the developed nations other world. Our healthcare industry is the least efficient, and almost its least effective. What’s more, the knowledge necessary to change our nation’s healthcare is known. We lack only the will to make it happen! How about starting with a discussion of the Smith Lever Act passed by Congress in 1914.

    Paul Nelson

    • I totally agree with you that the only way to get our debt under control is to control the cost of healthcare spending, both public and private. I have a recent post on this topic:
      It is true that nothing is happening right now to bring healthcare costs under control. But the Republicans do have a plan to accomplish this. It is the so-called “premium support” plan whereby everyone would get a (refundable) tax credit to purchase catastrophic insurance and perhaps also a small contribution to starting up a health savings account. This would replace the current tax exemption for employer provided health insurance. Everything else would be left up to the market to work out.
      I understand that the Smith Lever Act of 1914 does provide a framework for healthcare cooperatives but this would amount to a government imposed reorganization of healthcare. Why not just go to a single payer Medicare type system which would be much easier to implement?
      Conclusion: I’m holding out for a free-market solution for our healthcare mess.

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