New York Times columnist Paul Krugman is someone with whom I rarely agree. Okay, he is not only someone with whom I do not agree, but also someone whose sanity I question. With that in mind, I have to mention Krugman's latest column in which he lauds president Obama for the three great accomplishments of his first term. According to Krugman, the three are Obamacare, a reduction in income inequality and Wall Street reform. Krugman views these as great progressive accomplishments.
Strangely, I view the three as the seeds of destruction for the progressive ideology.
First, Obamacare is on the cusp of kicking in with its taxes, restrictions and social effects. By the 2014 election, all of the taxes will be hitting the middle class (except for the tax on so called Cadillac union health plans which was put off until 2018). All those folks who were told that their taxes would not go up will see their taxes go up. Meanwhile, the impact of the various insurance requirements will also have hit with full force. The average cost of insurance will have risen by three thousand dollars per year instead of declining by $2500 per year as Obama promised it would. That means middle class voters will be paying more taxes so that they can pay more for their insurance. On top of this, the number of uninsured people will not be declining. Too many folks will just drop insurance and pay the penalty rather than keeping the high priced policies that result from Obamacare. One respected projection is that the percentage of uninsured adults will rise by almot 5% by the end of 2014. What all this means is that the public dislike for Obamacare will change into disgust.
Second, the reduction in income inequality "achieved" by Obama is, according to Krugman, due to Obamacare and the recent tax deal that raised rates on the wealthy. Again, the conclusion here is laughable. Obamacare will not reduce income inequality since it will affect those at the top of the income scale in only a very minor way. Instead, what Obamacare does is to take many thousands of dollars each year in higher taxes and higher premiums from middle class families and transfer most of that to the government with a small part going to lower income families. This is not a reduction in income inequality; it is the impoverishment of the middle class. The tax rate rise will only affect about $60 billion per year. That money will be taken from the wealthy and given to the government. None of it goes to the lower end of the income spectrum. In other words, money will from from the rich to the powerful.
Wall Street reform is Krugman's way of saying the Dodd Frank law. Even Krugman could not come up with a benefit from the law. Krugman says that it must be good because Wall Street does not like it. By that reasoning, murder and disease must be good too. The reality is that Wall Street does not like Dodd Frank because it works to hamper economic growth. Small businesses are denied loans in the name of Wall Street reform. Banks are restricted in using their assets for purposes other than investing in government debt in the name of Wall Street reform. This just reduces the prospects for growth in the economy and the creation of new jobs. It is hardly a major accomplishment.
It will be interesting to see just how the 2014 elections play out. Right now, the story in the media is that the GOP is trying to figure out a way to hold onto the House in that election. It is a bogus story, much like the ones in 2009 about how the GOP would never hold power again. The truth is that it is way too early to predict the outcome of the next election. One thing is certain, however, the long term impact of Obama's three "accomplishments" lauded by Krugman will do much to insure continued success for Republican congressional candidates.
Strangely, I view the three as the seeds of destruction for the progressive ideology.
First, Obamacare is on the cusp of kicking in with its taxes, restrictions and social effects. By the 2014 election, all of the taxes will be hitting the middle class (except for the tax on so called Cadillac union health plans which was put off until 2018). All those folks who were told that their taxes would not go up will see their taxes go up. Meanwhile, the impact of the various insurance requirements will also have hit with full force. The average cost of insurance will have risen by three thousand dollars per year instead of declining by $2500 per year as Obama promised it would. That means middle class voters will be paying more taxes so that they can pay more for their insurance. On top of this, the number of uninsured people will not be declining. Too many folks will just drop insurance and pay the penalty rather than keeping the high priced policies that result from Obamacare. One respected projection is that the percentage of uninsured adults will rise by almot 5% by the end of 2014. What all this means is that the public dislike for Obamacare will change into disgust.
Second, the reduction in income inequality "achieved" by Obama is, according to Krugman, due to Obamacare and the recent tax deal that raised rates on the wealthy. Again, the conclusion here is laughable. Obamacare will not reduce income inequality since it will affect those at the top of the income scale in only a very minor way. Instead, what Obamacare does is to take many thousands of dollars each year in higher taxes and higher premiums from middle class families and transfer most of that to the government with a small part going to lower income families. This is not a reduction in income inequality; it is the impoverishment of the middle class. The tax rate rise will only affect about $60 billion per year. That money will be taken from the wealthy and given to the government. None of it goes to the lower end of the income spectrum. In other words, money will from from the rich to the powerful.
Wall Street reform is Krugman's way of saying the Dodd Frank law. Even Krugman could not come up with a benefit from the law. Krugman says that it must be good because Wall Street does not like it. By that reasoning, murder and disease must be good too. The reality is that Wall Street does not like Dodd Frank because it works to hamper economic growth. Small businesses are denied loans in the name of Wall Street reform. Banks are restricted in using their assets for purposes other than investing in government debt in the name of Wall Street reform. This just reduces the prospects for growth in the economy and the creation of new jobs. It is hardly a major accomplishment.
It will be interesting to see just how the 2014 elections play out. Right now, the story in the media is that the GOP is trying to figure out a way to hold onto the House in that election. It is a bogus story, much like the ones in 2009 about how the GOP would never hold power again. The truth is that it is way too early to predict the outcome of the next election. One thing is certain, however, the long term impact of Obama's three "accomplishments" lauded by Krugman will do much to insure continued success for Republican congressional candidates.
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