Trump/GOP Are Trying To Destroy Our Healthcare System

The following post is from the website of economist Paul Krugman: 

On the eve of the midterm election, American families are feeling financially stressed As the chart above shows, the percentage of families who say that their financial situation is good has plunged. For the first time since the post-Covid inflation of 2022, it has fallen below the percentage who say that their financial situation is bad.

Rising prices are the obvious explanation for this stress. And while presidents usually have much less influence on the economy than is generally recognized, the current outbreak of high inflation is all on Donald Trump. He began this with two wars of choice: one, a trade war with his destructive tariffs, and then an unwinnable military war in the most important energy transit point in the world.

There is, however, a third factor behind Americans’ anger, and it isn’t getting nearly as much attention as it should. There has been a catastrophic decline in health insurance coverage combined with sharply rising premiums for many of those who have managed to hang on to their coverage. And this, too, is all on Trump.

Here’s what happened: Trump and his congressional minions refused to renew the expanded subsidies that had made health insurance affordable for millions of Americans during the Biden years. At the same time the One Big Beautiful Bill imposed punitive work requirements that made it far more difficult for families to obtain Medicaid coverage.

And we haven’t felt the full effect of these changes yet — Republicans tried to backload the effects of the OBBB so that much of the pain will come after the midterms. But the consequences of this attack on healthcare have already been dire.

By June 2026 enrollment in Medicaid and the Childrens’ Health Insurance Programhad declined by more than 6 million since January 2025; 2.5 million of those losing coverage were children. KFF estimates that enrollment in individual plans, mainly via the Affordable Care Act, was down almost 5 million by June. The redoubtable Charles Gaba, putting these numbers together with other information, estimates that around 12 million Americans have lost health insurance under Trump 2.0.

That’s a lot of lost coverage, even in a nation as big as ours. And because many of the savage cuts Trump and his allies have imposed on healthcare have yet to kick in, the situation will get much worse in the years ahead. It’s worth noting thatkicking children off healthcare coverage is especially personally and socially destructive because it compromises their health and earnings potential for their entire lifetimes.

By the way, Trump, after all these years, is once again promising that he’ll come up with a “truly great” healthcare plan any day now. He’s now saying that he’ll send money directly to Americans, stopping payments to insurance companies — thereby demonstrating that he still has no idea how insurance works.

In any case, we’re now in the midst of an enormous healthcare disaster — a disaster that is receiving surprisingly little media coverage with, as far as I can tell, no recent articles on massive coverage losses in any of the major newspapers. I know that there’s a lot going on, but this seems odd. . . .

So if there is a blue wave 13 days from now, it won’t just be the result of inflation andTrump’s vainglorious wars. It will also in part be the result of a quiet but massive healthcare disaster.

And ultimately, of course, the political implications are a secondary concern. What really matters is that Trump and his party have done all they can to deny healthcare to millions of Americans. They have done this partly to save money — not to reduce the budget deficit, but to make room for tax cuts for the wealthy. They have also done it out of sheer cruelty.

There are many terrible things happening in America right now, from the debacle in Iran to the depredations of ICE. But the healthcare disaster, which will ruin many people financially and in some cases kill Americans who can no longer afford essential care, deserves much more attention than it is getting.

What Will Trump Do When He Has Nothing To Lose?

 The following is from the website of economist Paul Krugman:

According to CNN, all-out war with Iran may be about to resume:

The US military has developed new strike plans that include potentially using the so-called “mother of all bombs” to target Iranian energy infrastructure and nuclear sites should President Donald Trump give the order to resume combat operations either before or after the midterm elections, according to multiple US officials familiar with the matter.

Trump says that he won’t order a strike before the midterms. But Robert Pape, author of the Substack Escalation Trap, argues that we shouldn’t believe him — that the bombs may well drop before the midterms. And while I am not a strategic expert, I believe that Pape may well be right, because his analysis of Trump’s political position is something I recognize from financial economics.

You see, it’s a well-understood proposition that the owners of businesses that are on the verge of going bust often engage in destructive behavior. And Trump is about to go bankrupt — not financially (he’s made billions through corruption) but politically. So he, like a failing businessman, has strong incentives to wreak havoc.

Pape’s argument is basically a version of the phenomenon — a particular form of moral hazard — often called “gambling for resurrection.” When a company is on the edge of failure, it makes sense for the company’s owner to make highly speculative, even crazy investments that are highly likely to fail but might, just might, make enough money to pull the company back from the brink. After all, for the owner it’s heads he wins, tails his creditors lose.

In Trump’s case, all indications are that his party is heading for defeat in the midterms. And while a normal president might be able to live with a Congress controlled by the opposing party, there has been so much corruption and malfeasance over the past two years that Democratic control of Congress, and the subpoena and investigative power that will bring, will have catastrophic consequences for Trump and everyone around him.

So Trump has an incentive to do something, anything, that might shake up this election. Attacking Iran would probably lead to an even bigger Republican defeat, but it might, just might, rally Trump’s base enough to change the outcome. True, a president who cared at all about what is good for America wouldn’t pursue disastrous policies for the slim chance of saving his own political skin. But this is, after all, Trump we’re talking about.

Pape’s argument, then, makes a lot of sense. But I suspect that Trump’s impending political bankruptcy will have even worse consequences than Pape suggests — and that these consequences will continue and intensify after the midterms.

When I read Pape’s analysis, I found myself thinking about a classic 1993 paper by George Akerlof and Paul Romer, “Looting: The economic underworld of bankruptcy for profit.” Akerlof and Romer were inspired by several historical episodes of widespread bankruptcy, including the U.S. savings and loan crisis of the 1980s. In these episodes, they argued, owners of banks and other companies on the verge of failure didn’t gamble for resurrection. Instead, they simply took the money and ran, transferring as much of their companies’ assets as possible into their own pockets before the hammer came down.

So what would looting by a politically bankrupt Trump administration look like? I don’t mean financial looting — Trump has been doing that all along, on an epic scale. What may be about to happen — indeed, is already happening — is what we might call policy looting: Trump using his remaining power to take actions that are both deeply unpatriotic and deeply unpopular but fit his own preferences and prejudices.

Freedom, wrote Kris Kristofferson, is just another word for nothing left to lose. Once the midterms are over, Trump, with nothing left to lose, will be free to be his worst self — a malignant narcissist who instinctively supports authoritarians and is preoccupied with revenge against anything and anyone that threatens his fragile grandiosity.

We can already see that happening in U.S. policy toward Ukraine. It has long been obvious that Trump loves dictators and despises democracy, and that he has special affection for Vladimir Putin and hatred for Volodymyr Zelenskyy. However, as long as there was some chance of limiting the damage in the midterm elections, Trump was cautious about explicitly taking Putin’s side. Over the past few weeks, however, Trump has grown ever more open about supporting Putin’s attempted war of conquest — buying Russian diesel, canceling sanctions, and most recently by attempting to sabotage Ukraine’s defenses by degrading its access to Starlink.

Something similar has been happening on domestic policy where, for example, Trump has increasingly stopped pretending that he cares about illegal immigration or immigrant crime, and is veering into flat, open racism — so far specially directed against Somalis, but it won’t stop there.

So will Trump resume the bombing of Iran before the midterms? Obviously I don’t know, but Pape is surely right that normal political logic, under which a deeply unpopular president would avoid resuming a deeply unpopular war, no longer applies. And anyone who believes that Trump will become more cautious, more moderate in the aftermath of midterm defeat just doesn’t understand the new political reality.

The truth is that political bankruptcy will free Trump to pursue his true desires. And those desires are horrifying.

Massive Campaign Donations From Oligarchs Hurts Our Democracy

 From the website of Paul Krugman:

Today a relatively short note about how some political news bears on a controversy that has been brewing among some economists. Basically, some analysts are saying that we talk too much about mega-billionaires, and not enough about the merely very rich. Thus a new book by Owen Zidar and Eric Zwick, “The Everywhere Millionaire” — their Substack is here — points out that there are about 5 million Americans whose wealth exceeds $5 million. Of these, 3 million are what they call Main Street Millionaires, wealthy small business owners. And as they say, “Collectively, Main Street Millionaires have more than thirteen times the wealth of the Forbes 400.”

And they’re right that focusing only on the extremely (obscenely) rich misses the role played by wealthy small business owners.

Yet dismissing mega-billionaires — hey, they only own 4 percent or so of America — is deeply misleading, for these ultra-rich are at the heart of the rising power of big money in U.S. politics.

First, an economic observation: While the ultra-rich still don’t own as much of America’s wealthy as some may imagine, they have played a dominant role in the rising concentration of wealth.

Using data from realtimeinequality.org, the share of the top 1 percent — roughly corresponding to Zidar and Zwick’s definition of the wealthy — in U.S. wealth rose from 23.2 percent of total wealth in 1979 to 38.3 percent today. So one might think that the great rise in concentrated wealth was a “1 percent” phenomenon. But if we look at the changes in wealth share within the 1 percent, we find that very little of it involved the bottom 90 percent of that group, and most of it came from the top 0.01 percent — the one percent of the one percent:

The big rise in wealth concentration has come from the soaring wealth of a very small group, not the everyday millionaires.

And when it comes to political influence, billionaires wield power that vastly exceeds even their share of wealth. The Forbes 400 may only own 4 percent of U.S. wealth; but the New York Times found that 300 billionaires accounted for 19 percent of all reported federal campaign contributions in the 2024 election. And these are only reported, cash donations. Include other forms of influence — exemplified by Elon Musk’s purchase of Twitter and his conversion of the former public square into a site that elevates extreme right-wing propaganda — and it’s obvious that the malign political influence of a handful of the ultra-rich is much bigger than even those stunningly large donations suggest.

Now the Times reports that Musk is giving even more money in an attempt to help Republicans stave off midterm disaster than he gave in 2024:

Oh, and you won’t be surprised to learn that Musk repeatedly pushed a quickly refuted smear against James Talarico, the Democratic Senate nominee in Texas, and used his ownership of X, formerly Twitter, to amplify the smear.

Massive spending by Musk and other oligarchs probably won’t save Donald Trump’s party from a severe defeat — this time. And the vile smear against Talarico appears to be blowing up in Musk’s face (although how many voters heard the smear but never heard about its falsity?) But if Trump weren’t such a disaster as president, all that money might indeed have been effective.

And the only sustainable way to keep mega-billionaires from having so much power, so much ability to degrade democracy, is for them not to be so wealthy. Basically, a society that contains a class of ultra-wealthy oligarchs is well on its way to becoming a full-blown oligarchy.

So by all means let’s acknowledge that Musk, Bezos, Zuckerberg et al don’t own everything, that there are a lot of rich people who get less attention. But the oligarchs, not the Main Street Millionaires, are the clear and present danger to democracy.

GOP Congress Has Made It Easier For Their Rich Friends To Evade Paying Taxes

The following is part of an article by economist Paul Krugman: 

Much of the rise of the modern American oligarchy has been driven by deliberate policy rather than technological or market forces. And that deliberate policy has been the decades-long dismantling of the system of progressive taxation — a system that had ended the Gilded Age, the last period of great inequality. Starting in the 1970s, right-wing politicians pushed through large reductions in effective tax rates on the wealthy. And in the 2010s, Republican-controlled congresses stripped the IRS of resources to enforce the tax code. These two changes set the stage for the reemergence of immense fortunes, with vast social and political consequences.

What exactly does a “reduction in effective tax rates” mean? Much of that change was implemented through reductions in the statutory rates. For example, the top federal tax bracket on individual incomes was more than 90% in the 1950s, versus 37% now. Large corporations paid a tax rate of 52% on their profits in the 1950s, which is now down to 21%. Large estates paid a 77% tax rate until 1976; now the rate is only 40%, and that only applies to the value in excess of $15 million.

However, beyond these reductions in statutory rates, tax avoidance and tax evasion have grown significantly. “Avoidance” and “evasion” may sound like synonyms, but they are not: avoidance involves exploiting loopholes in the tax code in ways that are legal, even if they shouldn’t be, while evasion involves breaking the law.

And tax evasion is now a very big concern. Reasonable estimates of the “tax gap” — taxes that individuals and businesses are legally obliged to pay, but don’t — are startlingly large — $600 billion a year or more – approximately 40% of the current budget deficit. Furthermore, much of this tax gap is surely accounted for by tax evasion by high-income Americans. So tax evasion is a significant contributor to both the rise of American oligarchy and the high federal debt.

Thus it is startling to realize that, except for a brief attempt to reduce the tax gap by the Biden administration, the U.S. government has over time reduced its efforts to ensure that the wealthy pay the taxes they owe. It’s clear that the purposeful reduction in the enforcement of the tax code for the wealthy is both a symptom as a well as a cause of America’s rising oligarchy. It is a key factor in America’s downward spiral into oligarchy, which is currently ravaging our politics and our democratic institutions.

The Anti-Vax Agenda Is Being Driven By A Minority Of Right-Wing Republicans

 

From the website of Paul Krugman.

The U.S. Health Insurance System Is Already Mostly Socialized

 It may surprise many right-wingers who profess to hate "socialized medicine", but the U.S. health insurance system is already mostly socialized. Economist Paul Krugman explains:

A system under which the government would pay almost all medical expenses. Isn’t that socialism?

Well, if that is the criterion then much of U.S. healthcare is already socialist. In fact, the government’s role is so large that U.S. healthcare is better described as partially privatized socialism than as anything resembling a free market.

Let’s start with the raw numbers on health insurance, which pays the bulk of Americans’ medical expenses. Americans receive health insurance either from private companies or from public programs, overwhelmingly Medicare and Medicaid.

While a majority of Americans with health insurance get it from private companies, well over 100 million of us are covered by government programs instead. And these government programs pay more total dollars for medical bills than the private insurers do.

Why do government programs that cover a minority of the population account for a majority of health insurers’ outlays? Mainly because Medicare covers seniors, and we’re expensive. Also, while Medicaid covers many younger Americans, disabled and elderly beneficiaries account for most of its spending.

Even by the raw numbers, then, U.S. health insurance looks as much public as private. But that understates the government’s role: Private health insurance in the U.S. is both highly regulated and heavily subsidized.

This is obviously true for the insurance coverage purchased by tens of millions of Americans through the exchanges established by the Affordable Care Act. But employment-based health insurance, which covers 161 million Americans, is far more of a government creation than most people realize. For employment-based insurance exists largely because of huge implicit government subsidies that come with major strings attached.

Here’s how that works. If your employer pays you $10,000, that’s taxable income. But if your employer pays $10,000 toward a company health insurance plan that meets certain criteria, it isn’t taxable. That’s a huge effective subsidy, running at more than $300 billion a year. Take that subsidy into account, along with the more than $100 billion per year spent subsidizing policies purchased under the ACA, as well as the outlays on Medicare and Medicaid, and net effect is that the government pays for more than two-thirds of Americans’ health insurance.

Granted, there are strings attached. Roughly speaking, employment-based health plans can’t discriminate based on medical history — that is, they can’t deny coverage to employees with pre-existing conditions — and they also can’t offer the plans only to highly compensated employees — a health plan that is only for the C-suite is considered taxable income.

So given the restrictions of the federal tax code, employer-based health insurance is a lot like Obamacare, which also prohibits discrimination based on medical history and provides subsidies to make insurance affordable to lower-paid workers. The fact is that virtually all of private healthcare insurance is already well under some form of government control through regulation and tax subsidies. . . .

 If Medicare is socialism, then the whole U.S. health insurance system, with the government paying most of the bills and placing conditions on private insurers, is almost equally socialist. If you insist on calling any program the government pays for and regulates socialist, then U.S. healthcare would best be described as a partially privatized form of socialism.

And one must ask, what is the point of the part that is privatized? Do private insurers add anything positive? Or are they simply parasites, skimming off money that could have been paying for care?

The case for viewing insurers as parasites is strong. Many Medicare benefits are now delivered via Medicare Advantage, that is, plans paid for by the government but run through insurance companies. MedPAC, an independent advisory commission, estimates that last year Medicare Advantage plans were overpaid by $84 billion, thanks to practices such as “upcoding,” in which patients’ health problems are overstated to get larger sums from Medicare.

Assessing the waste from employer-based insurance is harder, but most evidencesuggests that private insurers have substantially higher administrative costs than Medicare does. Furthermore, the complexity of private insurance, with multiple payers all trying to deny care when they can, is a huge burden both on providers — doctors, nurses, and hospitals — and on patients.

What do private insurers offer to compensate for these costs? One must go through intellectual contortions to avoid the conclusion that they are, in fact, parasites.

Which brings me to El-Sayed. In supporting Medicare for All, he’s basically calling for an end to the partial, parasitic privatization of a healthcare system that is already hugely dependent on public funding. When one looks at it that way, it’s not at all a radical proposal. . . .

 The political calculus may very well have shifted since the 2000s, as Americans are fed up with a system of unaffordable premiums, rampant claim denials, and byzantine claim administration. Moreover, funding healthcare insurance through taxation would allow for a much more progressive distribution of the cost. That is, compared to the present system, middle-income households would pay less as high-income households would pay more. And the U.S. would stop wasting large sums on pointless administrative costs.

So let’s be clear: El-Sayed’s healthcare platform is perfectly reasonable on the merits of cost, fairness and health efficacy. And with private insurers never more hated, while millions of Americans are losing their health insurance, 2026 may be its time.