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Hard-left Democrats wrong again: Trump economic policies help the poor

Written By | Aug 31, 2019
hard-left Democrats, Trump economic policies

Cartoon by Branco. Reproduced with permission and by arrangement with Legal Insurrection. (See link at end of article.)*

WASHINGTON. We continue to hear sweeping proposals from the numerous Democratic candidates seeking that party’s nomination to run for President in 2020. The preferred blunt instrument of today’s hard-left Democrats: increasing entitlement programs and giving away free stuff. The crystal clear common to them all: Their party’s number one idea involves endless giveaways to low-income Americans to “cure” perceived social injustices. Their biggest problem: It’s the current Trump economic policies that are really helping the poor already.

Unfortunately, history tells us this approach ultimately fails when overly generous politicians run out of other people’s money to give away. (See Venezuela.

Let’s examine why giveaways to buy votes for hard-left Democrats at public expense end up causing more problems than they solve. And why the Trump economic policies are proving to be a far better idea.

The economic policies of hard-left Democrats simply don’t work.

For example, in this country, today’s increasingly hard-left Democrats want the federal government to control the entire health care industry. The goal: All Americans receive healthcare insurance regardless of their ability to pay. The Dems’ driving principle: All Americans are entitled to healthcare. Healthcare is a constitutional right, they argue. The fact that all Americans do not have health coverage amounts to a constitutional injustice.




Along those line,  they declare, young adults have the right to attend college regardless of their ability to pay. Therefore, college should be tuition-free for all. This is an “investment” the claim the country can and should make. After all, a well-educated population benefits all of us, right?

Some Dems further suggest that every adult American should receive a guaranteed minimum basic income whether he or she works or not. They argue that this, too, would be an investment that would eventually yield positive results. Americans would feel more secure. That should make them more productive. Whether they work or not.

While hard-left Democrats often claim their programs primarily benefit the middle class, that claim is provably false. Take a look at the current state of healthcare coverage in America. Prior to the passage of the Affordable Care Act (ACA) – aka, Obamacare – just under 85% of Americans had health insurance.  Nearly all of them claimed general satisfaction with their healthcare coverage, although many complained about its constantly increasing cost.

Affordable Care Act – Obamacare – did not help the middle class.

After the ACA’s passage, healthcare coverage in the US peaked at 91%. In other words, the complicated and costly ACA helped roughly an additional 6% of the population. That means 20 million Americans clearly benefited from the act. Meanwhile, the remaining 85% (285 million) of Americans who previously had – and liked – their health insurance coverage saw their costs increase even faster, given that they had to subsidize the additional 6% of ACA enrollees entitled to subsidized premiums.


Also read: Healthcare goals: cost, coverage, quality. Dems, GOP differ on priority


Many of the 85% also discovered they couldn’t “keep” their doctors under Obamacare. Worse, under their new plans, the quality of care and the selection of physicians decreased. Now, only one third of Americans are satisfied with their coverage, mostly because there is an increase in underinsured Americans.

Hard-left Democrats always focus on the 20 million low-income Americans who were “helped.” But they ignore the consistent majority of voters who always opposed ACA. That’s why they passed it anyway.

The problem of soaring college tuition costs.

How about college tuition, a currently popular giveaway promise? The Dems want all Americans taxpayers to pay for all eligible Americans to go to college without incurring any cost.  Right now, all eligible Americans can go to college. But they must bear the often considerable cost, which varies widely depending on the college selected. It also varies by how much the college wants you and how much they believe you can pay.

The current system leaves today’s new college graduates with an average debt of $30,000. Especially for those who graduated from 2007 to 2016, The poor job market under Obama made the burden of that debt often unbearable, especially for students who graduated from 2007 to 2016. Dems say this is an injustice. But under which party’s administration did that injustice occur?

Student debt is not really a problem.

Of course, the problem for new college grads does not really involve that $30,000 in debt. Nor does it involve the skyrocketing cost of college, which is admittedly getting much too high largely due to top-heavy, expensive college administrations and bureaucrats.



The real “student debt” problem involves a lack of opportunity for newly-minted college grads to earn sufficient income to pay off the debt and build individual wealth. The debt is repaid over a ten year period, meaning the monthly payment is about the same as a car payment, about $390. And that proved a heavy burden for college grads who found themselves trapped in minimum wage jobs during the Obama years. Because better jobs simply did not exist.

Tuition indebtedness is a certainly a very real problem if a college grad holds a low-income job. Or no job at all. And that often became a seemingly insurmountable problem for those that graduated in the economically stagnant 2008 – 2016 timeframe.

But the growing economy over the past two-and-a-half years under the Trump administration suddenly provided significantly better opportunities for old and newer grads alike. Grads salaries continue to increase, lessening the student debt problem.

If the growing economy results in a new grad earning an extra net income of $5,000 per year, that more than covers the cost of the student loan over a shorter period of time.

Fish and the hungry person.

The Dems’ approach to problem solving by throwing endless amounts of taxpayer money at perceived social issues reminds us of that oft-told story about a hungry person who confronts a prosperous fisherman with a plea for help. The fisherman could easily solve this issue by givin some of the excess fish he caught to the hungry individual. The fisherman doesn’t truly need all those surplus fish anyway.  But that simple, short-term solution creates two more problems that last infinitely.

First, the hungry person comes to reliy on the fisherman for food. Second, the fisherman now feels effectively obligated to continue catching enough food for his family and business as well as something extra food for the hungry individual who now depends on him.

This sort of problematic action / reaction precisely mirrors business as usual in large American inner cities. In such cities, families find themselves trapped in an endless loop. They grow accustomed to welfare payments for life, a pattern that long ago began to spand generations that knew no other way to live.

A better solution: The current Trump economic policies.

A far better solution that Democrats rarely consider is one that any businessperson would easily understand. Instead of to giving free fish to the hungry, why not teach them how to fish themselves. This would open the opportunity for them to catch their own fish and not rely on the endless generosity of others. It’s when such generosity become a permanent obligation for individuals and businesses that we create intractible long term problems.

The policies of President Trump, a businessperson and not a politically correct politician, attempt to create just this kind of proactive solution across the country. Even before taking office, he recognized that burdensome regulations, high tax rates and a handcuffed banked system consistently restrained national economic growth. That’s because the economy can’t provide opportunity to anyone, let alone the poor, unless it is growing. The currently implemented Trump economic policies have accomplished this.

Killing job-stifling regulations and cutting taxes

Trump got rid of counter-productive and growth stifling regulations.  He convinced Congress to lower tax rates and then convinced them to repeal some banking regulations.  Increasingly powerful and effective Trump economic policies continue to provide new and growing opportunities, especially to low income Americans.

Indeed, all Americans can now find newly available opportunities for real wage and career growth. Unemployment rates in virtually every category now sit at or near historic lows. The problem of underemployment has also been minimized, as college grads are finding jobs more suited to their education level, and at higher salaries. Suddenly student debt is becoming less of a problem for recent grads.

Elsewhere, lower income workers across the country can see their wages increase at the fastest rate in decades. Now, many more people can afford to buy their own health insurance or can get insurance at reasonable cost through their employer.

Although the mainstream media continue to portray Trump in an extraordinarily negative and biased light, he is really the one who is helping those Americans who really need the help. He accomplishes this not by giving handouts to those in need. Instead, he enables increasing opportunities for Americans who want to earn a higher income to purchase what they need and what they aspire to own.

That’s true prosperity. And that’s the American way.

— Headline image: Cartoon by Branco. Reproduced with permission and by arrangement with Legal Insurrection.

 

Michael Busler

Michael Busler, Ph.D. is a public policy analyst and a Professor of Finance at Stockton University where he teaches undergraduate and graduate courses in Finance and Economics. He has written Op-ed columns in major newspapers for more than 35 years.