PAYBACK IS A BITCH

Enjoy the new found cash generated by the president’s tax cuts.  You’re gonna’ need it.

Hardly a day goes by that we don’t hear the president giving himself a great big “attaboy” for passing his tax cuts.  Testimonials from folks seeing more money in their paychecks and workers exalting tax cut related bonuses furthers the president’s narrative.  “Anytime working Americans can keep more of their hard earned dollars is a good thing.” Says the president.

Here’s the thing… While the president’s tax cuts temporarily allow Americans to keep more of their hard earned cash, many of his other domestic policies will drive up the cost of living in a way that will drain that new found cash and more.

First of all the tax cuts for middle class working families and the working poor are temporary.  They only last seven years.  Seven years from now the time will come to pay the piper as struggling middle class families will essentially get a tax increase.  Meanwhile the top 1% wage earners will continue to enjoy the benefits of Trump’s tax cuts.  Why?  Ask Trump.

The Trump tax cuts added $1.5 trillion dollars to the nation’s long term debt.  Once the bastion of fiscal conservatism, the Republican Party tossed aside decades of fiscal conservative ideology to pass a mammoth tax cut bill without any mechanism to pay for the bill.  The net result, an additional $1.5 trillion added to the mountain of debt that will effect middle class families for generations to come.  Unless…

Unless Republicans maintain control of congress after the 2018 mid-terms.  Then Republicans will suddenly return to their fiscal conservative senses and with hair on fire fervor rail against the uncontrolled spending that has undermined our children’s future.  The only way to reduce the long term debt, they will say, is to cut funding to the major contributors of the nation’s borrowing woes: Social Security, Medicare and Medicaid. Social safety net programs that are essential for the long term care of middle class Americans.

So while middle class Americans enjoy a seven year tax break they will pay for it in the long run with reduced entitlement benefits and increased out of pocket costs in their retirement years.

We see the same thing with the president’s policies on health care.

The president promised to repeal and replace Obamacare with: “beautiful insurance coverage at a much cheaper price.”  But the great deal maker couldn’t get it done.  So in an effort to appease his base the president enacted a series of executive orders that undercut the funding mechanisms that formed the financial foundation for Obamacare.  Including in the executive orders, the repeal of the hated mandate.

As a result 15 million Americans will lose their subsidies and consequently their health care.  These folks will all flock to local emergency rooms for their health care needs with the cost of unpaid for services being passed on to premium paying customers.  Hospitals will raise their prices to compensate for the unpaid for services rendered.

With the repeal of the mandate Trump guaranteed that younger healthier people will choose not to buy health insurance leaving a pool of the elderly and the infirmed.  Insurance companies will respond by raising rates to account for the older sicker pool of customers meaning higher insurance costs for everyone.

The result…a return to the skyrocketing cost of health care in days before Obamacare.  A financial burden that will born on the backs of the middle class and the working poor.

Then there are the tariffs.

Trump’s recent decision to levy a 25% tariff on steel and a 10% tariff on aluminum will no doubt be well received by domestic manufactures of those products.  But Trump’s policy wrongly assumes that foreign nations will sit by idly without a response.  Not so much.  The EU has already announced its intent to apply tariffs on Levis, bourbon and Harley Davidson motorcycles.  Similar responses from other nations on a host of products are certain to come.  The result is the cost of goods to middle class families just got more expensive.

American taxpayers should enjoy the new found cash generated by Trump’s tax cuts.  They’re gonna’ need it.