The House and Senate have now each passed their own similar tax bills and a conference will come up with a single unified plan. Each of the individual bills has been scored to add $1 trillion to the national debt over a ten year period and so the final plan will almost surely have this same feature.
With our public (on which interest is paid) debt now 77% of GDP, the highest since right after WWII, and already growing rapidly, this is an extremely unattractive, and even dangerous, feature of the tax plan.
One of our most cherished principles in the U.S. is “liberty and justice for all.” But consider the normally perceived philosophical differences between the two political parties:
- The Republicans are the party of liberty concentrating on providing maximum opportunity for people to succeed in life by realizing their full potential. This means fostering strong economic growth in order to have lots of opportunities for self-betterment. It also means keeping government at all levels as lean and efficient as possible, so as to minimize interference with private initiative. Excessive public debt is a particular anathema by creating a huge public burden, especially on future generations.
- The Democrats are the party of justice concentrating on helping to provide the less fortunate members of society with the necessities of life by means of public support programs. This also means working to oppose all forms of prejudicial behavior based on race, gender, sexual orientation, etc. In addition it means trying to alleviate the inevitable income inequalities which arise in a free and dynamic society like ours, primarily with redistribution of tax revenues.
Conclusion. Both parties have fundamentally important principles. They gain and keep adherents by fighting for what they believe in. If the national Republican Party becomes lackadaisical about our huge national debt, as it appears to be right now, it risks losing its reputation for fiscal responsibility. This will do it great damage.
Saint Augustine ( 354-430 ) said: “In the absence of justice, what is sovereignty but organized robbery?” For the purpose of economic growth, Congress is proposing to eliminate the individual mandate. Among other reasons, it was only another tax penalty according to the Supreme Court. The goal of universal health insurance was the ultimate purpose of Obamacare (ACA 2010). The elimination of the individual mandate, although costly, ultimately contributes to our nation’s level of social justice. Since none of our nation’s current methods for healthcare reform are unlikely to significantly improve its high cost and uneven quality.
Although there has been an effort to solve these cost and quality issue, it is now derailed by a Congressional preoccupation with political Capital. As a result we continue to accrue a huge national debt, now based primarily on the excess level of national health spending. By any reasonable assessment, the excess was at least $3,500 per citizen last year. In effect, each citizen is paying our Congress to accumulate the Political Capital to accomplish nothing. Seems like robbery to me!
Let me remind everyone that the Design Principles for managing a Common Pool Resource (CPR), as in the portion of our national economy devoted to health spending, have been defined and verified. We only lack the will to make it happen. Applying these Principles does not require over-all changes in the institutional structure of our nation’s healthcare. It does require a recognition that ultimately true reform must occur beginning in each community with a goal of social justice.
Since Congress did not succeed in repealing the ACA last summer, in effect the U.S. now has (the beginnings of) universal healthcare. This will turn out to be Obama’s greatest legacy. This is the justice that St. Augustine is talking about.
But the healthcare cost issue is still with us and getting worse all the time. We badly need cost containment for both Medicare and Medicaid but it’s not at all clear to me how this is going to happen.