The Sharp, Extreme Devolution of the Role of Government

And an assignment for those of us watching the damage being done to vulnerable people.

Just peruse this AM’s headlines (my bolds):

—WSJ: GOP Plans Hikes Deficits, Analysis Says: “Republicans’ tax-and-spending megabill would increase budget deficits by $2.8 trillion through 2034 after factoring in the projected economic growth the bill would create, leading to 15% more red ink than previously estimated, according to the Congressional Budget Office.”

This is telling us that when CBO adds the dynamic, growth effects that the bill’s advocates claim will offset its cost, the bill becomes even more expensive. The higher interest rates the bill is expected to generate add $400 billion more to its 10-year cost, not to mention raising the cost of borrowing for everyone.

—WSJ (literally right below the article cited above): Bill Would Shield More Estates From Taxes: The bill passed in the House last month and the Senate Finance Committee proposal released Monday both would permanently allow people to hand their heirs $15 million without paying a dime…An individual worth $15 million who died this year would owe $404,000 in federal estate taxes, assuming no deductions for state estate taxes or charitable bequests. If they died on Jan. 1, under current law they would owe $3.14 million. If the tax bill passes with the new $15 million exemption amount, they would owe nothing.

—Axios: Immigration crackdown hits elder care: “‘We have facilities with empty wings and it's not for lack of residents. It's just for lack of staff,’ says Robin Wolzenburg, the senior vice president of clinical and regulatory services with Leading Age Wisconsin.”

—Axios (scrolling down): “Low-income Americans are looking like the losers in the Senate version of President Trump's signature tax bill…[The Senate version of the bill] includes new work requirements for parents of kids ages 15 and over to qualify for Medicaid. The House bill exempted all adults with dependents…Research shows the red tape that comes with these policies often lead even those who qualify to lose benefits.”

I could easily keep going, but here’s one more that is equally egregious but risks flying under the radar, from the NY Times:

“Bipartisan approval of the bill, known as the GENIUS Act, followed an aggressive lobbying campaign aimed at transforming the cryptocurrency industry’s image from scandal-plagued experiment to legitimate financial sector.”

To be fair, there were some Ds who aggressively opposed the bill, but many went along, their pockets firmly padded with industry bribes.

I’m going to assume you’ve seen this Budget Lab figure, which summarizes the combined impact of the skewed-to-the-rich tax cuts and the skewed-against-the-rest tariffs. Here’s the table showing $ losses for the bottom 80%:

How did it come to pass that gov’t is working so aggressively against the very people it should be helping? It is obvious that low-income people lack—well, income—but also health coverage, a problem long addressed by subsidized care. History could literally not be clearer that large tax cuts for the wealthy don’t help anyone else. They just exacerbate after-tax inequality and lead to a less sustainable fiscal path. It is equally obvious that non-sovereign digital currencies have zero use cases unless your a scammer or a fraudster. I’ve yet to hear a coherent explanation of why we need a stablecoin pegged to the dollar when we have the dollar, and I doubt I ever will.

At one level, the answer is obvious, as that crypto example reveals: there’s tons more lobbying $’s for wealthy causes like financial deregulation and cutting estate taxes than for protecting Medicaid and SNAP. And those well-endowed forces have increasing taken down the guardrails and legal strictures that were supposed to balance their power on behalf of the powerless.

But there’s another dimension that’s (d)evolved in the Trump era: a powerful, faux populism that works to convince significant swaths of the electorate that all of the above is somehow on their behalf, designed to take revenge on the elites (and the immigrants) that disparaged and blocked them. This false populism is thoroughly interdependent with a highly effective media infrastructure that supports it.

Which brings to me final point, one in which there is a germ of hope. (For the record, I of course realize that the “what happened?” question deserves a lot bigger treatment then I give it here; this is the stuff of a 90-minute Ezra Klein podcast! BTW, here’s another recent podcast on this topic that I found interesting.)

There is, of course, a massive contradiction in the above headlines. Virtually every aspect of the Trump/R agenda is hugely unpopular. I don’t have time to go through the polls right now, but the tariffs are heavily disparaged from the WSJ to MSNBC and the more people, including Rs, learn about the budget bill, the further underwater it sinks.

Now, I fully admit that political gravity isn’t what it used to be, but it’s still true that if you do enough things that actually hurt enough people, you will lose. To be clear, that’s not a platform for correcting the persistent imbalances and the decades-long, highly successful conservative project to shift the purpose of gov’t from helping the vulnerable to hurting the vulnerable on behalf of the wealthy. That agenda is waiting (and waiting…and waiting) for an opposition party to discover, embrace, and disseminate in language people can understand.

But policy unpopularity ain’t nothin.’ It is therefore up to us to not only fight these measures, but perhaps even more importantly, to track their damage when they are implemented. Yes, that same noise machine cited above as central to false populism’s infrastructure will relentlessly try to block such information; to, if I may speak colloquially, convince people that its raining when they’re pissing on you.

But that just means we must be louder. Everyone of the headlines above has millions of people behind it who will be lastingly damaged by these actions. They must know the source of their pain and they must be presented with a political alternative that uses gov’t as a tool to help them, not hurt them.