We should emphasize the counter-factual - what would the macroeconomy likely look like if we had a better president? The answer is much better. Just because we can't see the costs compared to where we should be doesn't mean they aren't massive.
Thanks for your analysis and summary. One point not developed here is debt. (Alluded to when you mentioned fiscal policy problems.) Government debt is growing way too fast. Does this juice the economy, causing GDP to power on? And will this induce excessive inflation, thereby cutting real GDP?
I point out what I have pointed out before, that the just-happened 1/1/26 lapsed ACA expanded subsidies (affecting and in almost all cases raising the premiums and copays for 24 the million people relying on that for coverage), and the coming cuts to ACA expanded Medicaid in OBBB, which covers a separate 20 million people, are not reflected in the standard measures CPI and "real wage". (Because they are means-tested. From: https://www.bls.gov/opub/hom/cpi/concepts.htm "the CPI does not reflect changes to means-tested subsidies (dependent on the recipient’s income)".
(The two items I mentioned, totaling 44 million people, and not reflected at all in the standard measures, are the various ACA cuts that Democrats unsuccessfully fought to reverse at the end of last year. There is recent information: both data on the coverage-loss effects (of the part that already happened), and misleading information from the administration on both parts.)
I have tried to keep people reading JB's comment section up to date on the effects of the two cuts, in prior comments here on JB.
Owing in part to some recent Jonathan Cohn posts, there is new information emerging on both the effects, and the deceptions that have come, and will come, from the Republicans and the administration on these cuts.
(So, I'll post it all here (via links), noting that some of the information has been seen here in the JB comments prior, and may be familiar to both people who read my comments.)
The Cohn posts are on his Bulwark sub-account, behind a Bulwark Substack paywall, but I have alternative links not behind a paywall to the information. One of those from me, actually.)
(Jonathan Cohn is a health and health-system reporter, and author of "The Ten Year War" (on the ACA), written about 6 years ago, when the war by the Republicans had only been going on for 10 years.)
The serious ACA weakenings are these two, that the Democrats fought, unsuccessfully, with the shutdown at the end of last year, to reverse:
1) ACA on-exchange coverage via 1/1/26 non-extension of the on-exchange expanded subsidies.
(Data on the coverage losses from this are now coming in, the losses look large, and there is evidence of misleading information about this will come from the administration, claiming falsely that the considerable coverage losses are mainly due to fraud reduction by the administration. Detailed in linked Substack posts below.)
2) ACA expanded Medicaid via OBBB work requirements and other restrictions going into effect start of 2027
(Misleading information from the administration has also come about the effects of this, being a claim of significant poverty reduction. Detailed also in linked Substack posts below.)
(Note the former, ACA on-exchange, covered, in 2025, roughly 24 million people, and the latter, ACA expanded Medicaid, a separate set of about 20 million people. So, the programs that covered about 44 million people total, at least before the damage, are what are affected.)
--
On the first--the lapsed expanded subsidies:
There is information is that the observed coverage drops are high (3 to 5 million of about 24 million covered in 2025), that the information on the numbers of drops seems to be being delayed by the administration, and that misleading claims from the administration that the large drops are due mainly to the administration's successful reduction in fraud are forthcoming.
So, there was a pretty comprehensive look at this from Jonathan Cohn of a few days ago, here:
The posts (Jonathan's and mine) are is on the coverage drops now showing up, with a lot of other information on what seems to misleading statements coming from the administration, which are still in process.
A lot of the information in his post and mine overlaps. Some is in one or the other, but not both.
The information in mine, is:
The coverage drops from data gradually rolling in,
The apparent non-release of some data by CMS with the drops,
The leaked-from-CMS information that the administration is planning a response falsely indicating the coverage drops are due to the administration's successful cracking down on fraud
The current, kind of weak, propagandistic response from the Washington Post editorial department using a report from the Paragon Health Institute. (The president himself seems not to have directly made a statement on this yet. It may be that the large coverage drops have taken the administration by surprise, and, as well, the Paragon report really doesn't support any substantial reduction of fraud, even though it is a pretty propagandistic document. It will be interesting to see if the president tries to delay all data release until after the midterms.)
We also both cover some of:
The history of the deception, and lies, and apparently weak research that the Republicans used last year to justify not extending the expanded subsidies.
(Between my post and Jonathan's, many of the same, and some different details are covered. Jonathan probably has a bit of an easier to read, polished style. If you read Jonathan's, and you want to really suck up all the details he has, I suggest clicking on all of his links, and reading all of his footnotes.)
---
On the second--on the OBBB damage to mainly expanded Medicaid starting beginning of 2027:
It seems the administration has prepared highly questionable research indicating a large coming reduction in poverty due to the work requirements for expanded Medicaid, by them making a lot of people get out of poverty by choosing to work.
Jonathan links to some non-paywalled analysis of the issue by a pair of health economists here, for those interested:
focusing very much on the chaos that is likely to come as 51 state+DC Medicaid agencies struggle to manage handling the technical complexity of the coming work and other requirements.
I have my own non-paywalled post that hits some of this:
(As I actually have some experience with the ACA, where, before aging into standard-Medicare-for-Me with my medigap, I had 8 years on the ACA / expanded Medicaid system in Massachusetts. So, the insurance system we have, including the ACA and expanded Medicaid, has such byzantine complexity that without absolute computer geniuses designing the computer systems at each and every Medicaid agency, much will go wrong, and much does.
Thus, in Massachusetts, which is a state that actually wants the ACA to work, in the eight years I used the ACA for coverage, though I did everything correctly, and was always eligible for coverage, I was placed in primal fear for either my health, my finances, or both, no less than five times.
And now, significant complexity has been added by OBBB, for each of the 51 Medicaid agencies, and actually, the federal and state exchanges as well, because expanded Medicaid ineligibility is required for on-exchange ACA eligibility. What a mess!)
As a former history teacher I look back, are we emulating the economics prior to Black Tuesday? Are “Magnificent Seven” driving the market? Is AI far more powerful than we understand?
If the economy nosedives do we cheer and say “we told you so” as unemployment explodes?
I looked at the Job Quality Index at Buffalo NYU. It shows data for nonsupervisory full-time workers, 1) their average weekly income, and 2) the average income for the 45% above average and 3) the 55% below the average. The average wage, annualized, is now $57,071; the higher 44% earn $78,468, the lower 56% earn $39,676 -- as you can see the lower earners earn about half the income of the higher earners.
Looking from April 2025 to April 2026, the total job growth was 44,000, which is 3,666 per month. That growth number does not match the BLS numbers. But,
The high paying 45% lost 1,116,000 jobs while the lousy jobs increased by 1,160,000 -- yielding a plus gain of 44,000.
Conclusion: the economy last year created only a few jobs and all of them were lousy paying, and the good paying jobs shrank in number.
The BLS shows private employment increasing by 48,000 per month or 576,000 over the year, April to April. Job growth was almost triple that rate 2015 to 2020.
I wonder about the accuracy of the JQI. But some jobs hardly pay a living wage, and the purpose of the JQI is to track the growth or decline of good jobs.
Trump not only hurts the American economy, but the world economy. European countries, Japan… have been hurt by the tariffs. The rest of the world is also paying the same high gasoline prices. Inflation in Europe also is up and interest rates (mortgages) have risen.
The Soviet Union and like-minded socialist countries used to put a lot of faith on long term planning - until they planned themselves into the oblivion. Clearly, the economy of nations performs best when left to enterpreneurs and the markets. Trump's awful policies do not hurt much, just as socialists' earnest planning did not help.
As long as unemployment is below 5% or so, voters care only about inflation. Headline CPI inflation on the way down in next release, but only to 4% annual rate. Team Trump will be tempted to celebrate fall in inflation rate from 4.2%. Risk is that they will sound like they are celebrating 4% inflation. Core PCE inflation -- focus of Powell Fed -- looks stuck at 3.3% for next few months. So, no interest rate relief in sight until Chair Warsh commands majority on Fed Committee.
I completely agree with your conclusions. And T and the sycophants in his administration are too stupid (xenophobic/racist/etc.) to realize the negative consequences of their actions.
So, I called the public relations number at the company, and, much as I suspected, it's not our Dean Baker (economist long-time-pal of JB, with his own Substack).
For the Hydroponically-Grown Organic Peanut Butter, there is no Dean Baker. It's just a made-up name, that was chosen to suggest a person who had a genuine fanatical interested in hydroponic growing, and organic growing, and genuine honesty, who would thus create a great, ultra-high-quality product.
The IPO is the work of 3 NYU MBAs who live on the upper east side of Manhattan, and the one that I spoke with indicated he never heard of a liberal economist named Dean Baker. Nor any liberal economist, except for Paul Krugman. (Who he volunteered that he agreed with Scott Bessant, that Krugman was "toxic", and might even try to raid whatever capital could be accumulated with the IPO.)
--
(I think it's probably a bad practice to mix one highly serious policy comment with another one that is a complete joke, but I did it anyway! 😊)
We should emphasize the counter-factual - what would the macroeconomy likely look like if we had a better president? The answer is much better. Just because we can't see the costs compared to where we should be doesn't mean they aren't massive.
Good point! Should have included this exercise to do exactly that, we would be good to repeatedly update:
https://www.americanprogress.org/article/the-trump-administrations-policies-have-hurt-growth-jobs-and-prices/
Thanks for your analysis and summary. One point not developed here is debt. (Alluded to when you mentioned fiscal policy problems.) Government debt is growing way too fast. Does this juice the economy, causing GDP to power on? And will this induce excessive inflation, thereby cutting real GDP?
There's a bit of that going on but maybe less than you'd think. See this "fiscal impulse" tracker: https://www.brookings.edu/articles/hutchins-center-fiscal-impact-measure/
As noted in the text, my main concern in this space is fiscal pressure on interest rates.
On the little "cutting health benefits part":
I point out what I have pointed out before, that the just-happened 1/1/26 lapsed ACA expanded subsidies (affecting and in almost all cases raising the premiums and copays for 24 the million people relying on that for coverage), and the coming cuts to ACA expanded Medicaid in OBBB, which covers a separate 20 million people, are not reflected in the standard measures CPI and "real wage". (Because they are means-tested. From: https://www.bls.gov/opub/hom/cpi/concepts.htm "the CPI does not reflect changes to means-tested subsidies (dependent on the recipient’s income)".
(The two items I mentioned, totaling 44 million people, and not reflected at all in the standard measures, are the various ACA cuts that Democrats unsuccessfully fought to reverse at the end of last year. There is recent information: both data on the coverage-loss effects (of the part that already happened), and misleading information from the administration on both parts.)
I have tried to keep people reading JB's comment section up to date on the effects of the two cuts, in prior comments here on JB.
Owing in part to some recent Jonathan Cohn posts, there is new information emerging on both the effects, and the deceptions that have come, and will come, from the Republicans and the administration on these cuts.
(So, I'll post it all here (via links), noting that some of the information has been seen here in the JB comments prior, and may be familiar to both people who read my comments.)
The Cohn posts are on his Bulwark sub-account, behind a Bulwark Substack paywall, but I have alternative links not behind a paywall to the information. One of those from me, actually.)
(Jonathan Cohn is a health and health-system reporter, and author of "The Ten Year War" (on the ACA), written about 6 years ago, when the war by the Republicans had only been going on for 10 years.)
The serious ACA weakenings are these two, that the Democrats fought, unsuccessfully, with the shutdown at the end of last year, to reverse:
1) ACA on-exchange coverage via 1/1/26 non-extension of the on-exchange expanded subsidies.
(Data on the coverage losses from this are now coming in, the losses look large, and there is evidence of misleading information about this will come from the administration, claiming falsely that the considerable coverage losses are mainly due to fraud reduction by the administration. Detailed in linked Substack posts below.)
2) ACA expanded Medicaid via OBBB work requirements and other restrictions going into effect start of 2027
(Misleading information from the administration has also come about the effects of this, being a claim of significant poverty reduction. Detailed also in linked Substack posts below.)
(Note the former, ACA on-exchange, covered, in 2025, roughly 24 million people, and the latter, ACA expanded Medicaid, a separate set of about 20 million people. So, the programs that covered about 44 million people total, at least before the damage, are what are affected.)
--
On the first--the lapsed expanded subsidies:
There is information is that the observed coverage drops are high (3 to 5 million of about 24 million covered in 2025), that the information on the numbers of drops seems to be being delayed by the administration, and that misleading claims from the administration that the large drops are due mainly to the administration's successful reduction in fraud are forthcoming.
So, there was a pretty comprehensive look at this from Jonathan Cohn of a few days ago, here:
https://substack.com/@citizencohn/p-201946924 called "The Obamacare 'Phantom' Menace"
(That Cohn post actually mentions little old me, and also my post on mainly the same stuff, in its footnote (3) !)
My post is here, and is free (as an alternative or supplement, or if you can't get behind the Bulwark paywall):
https://normspier828307.substack.com/p/loss-of-aca-coverage-after-republicans
The posts (Jonathan's and mine) are is on the coverage drops now showing up, with a lot of other information on what seems to misleading statements coming from the administration, which are still in process.
A lot of the information in his post and mine overlaps. Some is in one or the other, but not both.
The information in mine, is:
The coverage drops from data gradually rolling in,
The apparent non-release of some data by CMS with the drops,
The leaked-from-CMS information that the administration is planning a response falsely indicating the coverage drops are due to the administration's successful cracking down on fraud
The current, kind of weak, propagandistic response from the Washington Post editorial department using a report from the Paragon Health Institute. (The president himself seems not to have directly made a statement on this yet. It may be that the large coverage drops have taken the administration by surprise, and, as well, the Paragon report really doesn't support any substantial reduction of fraud, even though it is a pretty propagandistic document. It will be interesting to see if the president tries to delay all data release until after the midterms.)
We also both cover some of:
The history of the deception, and lies, and apparently weak research that the Republicans used last year to justify not extending the expanded subsidies.
(Between my post and Jonathan's, many of the same, and some different details are covered. Jonathan probably has a bit of an easier to read, polished style. If you read Jonathan's, and you want to really suck up all the details he has, I suggest clicking on all of his links, and reading all of his footnotes.)
---
On the second--on the OBBB damage to mainly expanded Medicaid starting beginning of 2027:
A great Jonathan Cohn post came out a few days before the other Cohn post on these (behind a bulwark Substack paywall :https://www.thebulwark.com/p/donald-trump-incredibly-misleading-downright-outrageous-case-medicaid-cuts-work-requirements .)
It seems the administration has prepared highly questionable research indicating a large coming reduction in poverty due to the work requirements for expanded Medicaid, by them making a lot of people get out of poverty by choosing to work.
Jonathan links to some non-paywalled analysis of the issue by a pair of health economists here, for those interested:
https://donmoynihan.substack.com/p/the-trump-administrations-dubious , for those interested.
Also, on the OBBB damage to expanded Medicaid and the work requirements, there is an earlier Jonathan Cohn post (Bulwark paywalled):
https://substack.com/@citizencohn/p-196250677
focusing very much on the chaos that is likely to come as 51 state+DC Medicaid agencies struggle to manage handling the technical complexity of the coming work and other requirements.
I have my own non-paywalled post that hits some of this:
https://normspier828307.substack.com/p/a-new-aca-defect-created-by-the-one
(As I actually have some experience with the ACA, where, before aging into standard-Medicare-for-Me with my medigap, I had 8 years on the ACA / expanded Medicaid system in Massachusetts. So, the insurance system we have, including the ACA and expanded Medicaid, has such byzantine complexity that without absolute computer geniuses designing the computer systems at each and every Medicaid agency, much will go wrong, and much does.
Thus, in Massachusetts, which is a state that actually wants the ACA to work, in the eight years I used the ACA for coverage, though I did everything correctly, and was always eligible for coverage, I was placed in primal fear for either my health, my finances, or both, no less than five times.
And now, significant complexity has been added by OBBB, for each of the 51 Medicaid agencies, and actually, the federal and state exchanges as well, because expanded Medicaid ineligibility is required for on-exchange ACA eligibility. What a mess!)
Questions about the rule of law threatens foreign investment. Return of capital becomes more important than return on capital.
I was taught GDP is the product of productivity gains plus population growth. Cutting off immigration slows GDP growth
As a former history teacher I look back, are we emulating the economics prior to Black Tuesday? Are “Magnificent Seven” driving the market? Is AI far more powerful than we understand?
If the economy nosedives do we cheer and say “we told you so” as unemployment explodes?
Step 1: win in November 🫠
I looked at the Job Quality Index at Buffalo NYU. It shows data for nonsupervisory full-time workers, 1) their average weekly income, and 2) the average income for the 45% above average and 3) the 55% below the average. The average wage, annualized, is now $57,071; the higher 44% earn $78,468, the lower 56% earn $39,676 -- as you can see the lower earners earn about half the income of the higher earners.
Looking from April 2025 to April 2026, the total job growth was 44,000, which is 3,666 per month. That growth number does not match the BLS numbers. But,
The high paying 45% lost 1,116,000 jobs while the lousy jobs increased by 1,160,000 -- yielding a plus gain of 44,000.
Conclusion: the economy last year created only a few jobs and all of them were lousy paying, and the good paying jobs shrank in number.
The BLS shows private employment increasing by 48,000 per month or 576,000 over the year, April to April. Job growth was almost triple that rate 2015 to 2020.
I wonder about the accuracy of the JQI. But some jobs hardly pay a living wage, and the purpose of the JQI is to track the growth or decline of good jobs.
Trump not only hurts the American economy, but the world economy. European countries, Japan… have been hurt by the tariffs. The rest of the world is also paying the same high gasoline prices. Inflation in Europe also is up and interest rates (mortgages) have risen.
The Soviet Union and like-minded socialist countries used to put a lot of faith on long term planning - until they planned themselves into the oblivion. Clearly, the economy of nations performs best when left to enterpreneurs and the markets. Trump's awful policies do not hurt much, just as socialists' earnest planning did not help.
As long as unemployment is below 5% or so, voters care only about inflation. Headline CPI inflation on the way down in next release, but only to 4% annual rate. Team Trump will be tempted to celebrate fall in inflation rate from 4.2%. Risk is that they will sound like they are celebrating 4% inflation. Core PCE inflation -- focus of Powell Fed -- looks stuck at 3.3% for next few months. So, no interest rate relief in sight until Chair Warsh commands majority on Fed Committee.
I completely agree with your conclusions. And T and the sycophants in his administration are too stupid (xenophobic/racist/etc.) to realize the negative consequences of their actions.
I guess I owe people the promised additional research on something I mentioned last week (https://econjared.substack.com/p/too-much-wealth-concentration-not/comment/276160846 ) , that second IPO that was on the same day as SpaceX, for "Dean Baker's Hydroponically-Grown Organic Peanut Butter".
So, I called the public relations number at the company, and, much as I suspected, it's not our Dean Baker (economist long-time-pal of JB, with his own Substack).
For the Hydroponically-Grown Organic Peanut Butter, there is no Dean Baker. It's just a made-up name, that was chosen to suggest a person who had a genuine fanatical interested in hydroponic growing, and organic growing, and genuine honesty, who would thus create a great, ultra-high-quality product.
The IPO is the work of 3 NYU MBAs who live on the upper east side of Manhattan, and the one that I spoke with indicated he never heard of a liberal economist named Dean Baker. Nor any liberal economist, except for Paul Krugman. (Who he volunteered that he agreed with Scott Bessant, that Krugman was "toxic", and might even try to raid whatever capital could be accumulated with the IPO.)
--
(I think it's probably a bad practice to mix one highly serious policy comment with another one that is a complete joke, but I did it anyway! 😊)